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Tax Rates Changes

Tax treatment varies according to individual circumstances and is subject to change.

Please note there are differences in some of the tax rates in Scotland.

Income Tax Rates and Allowances

Income Tax allowances 2015-16 2016-17 2017-18
Personal Allowance (1) £10,600 £11,000 £11,500
Blind Person's Allowance £2,290 £2,290 £2,320
Age related allowance
Personal if born before 6/4/38 £10,600 N/A N/A
Married couples/civil partner at 10% - minimum (2) £3,220 £3,220 £3,260
Married couples/civil partner at 10% - maximum (2) £8,355 £8,355 £8,445
Dividend and Savings Allowances
Dividend Tax Allowance (DTA) (3) N/A £5,000 £5,000
Personal Savings Allowance (basic rate taxpayer) N/A £1,000 £1,000
Personal Savings Allowance (higher rate taxpayer) N/A £500 £500

(1a) For those earning over £100,000, the personal allowance is reduced by £1 for every £2 earned so that those earning over £122,000 (2015/16 £121,200).

(1b) Up to 10% of the PA (2016/17:£1,100; 2015/2016: £1,060 2017/18: £1,150) can be transferred to a spouse or civil partner who is no more than a basic rate taxpayer.

(2) Where at least one spouse/civil partner was born before 6 April 1935.

(3) The DTA taxes the first £5,000 of dividend income at nil rather than the rate that would apply otherwise.


Income Tax rates and taxable bands

Rate 2015-16 2016-17 2017-18
Starting rate for savings: 10%*

£0-£2,710

£0- £2,790

£0- £2,790

Basic rate: 20% £0-£31,785 £0-£32,000 £0-£33,500
Higher rate: 40% £31,786- £150,000 £32,001- £150,000 £33,501- £150,000
45% from 6 April 2013 Over £150,000 Over £150,000 Over £150,000

Personal Allowances and Tax Bands

Year Personal Allowances Higher Rate Tax Band
2014-2015 £10,000 £31,865 (+£10000=£41,865)
2015-2016 £10,600 £31,785 (+£10600 = £42,385)
2016-2017 £11,000 £32,000 (+£11000 = £43,000)
2017-2018 £11,500 £33,500 (+£11500 = £45,000)

The new dividend tax

The new dividend tax starts on 06/04/2016 - each individual will receive an annual tax free dividend allowance of £5,000. Dividends will no longer be paid with a notional tax credit and the effective rate of tax will be increased by 7.5%

TAX RATE 16/17 Taxable income
Starting rate 0%
 
0 - £5,000
Basic rate:
Income other than dividend: 20%
Dividend income: 7.5%
0 - £32,000
Higher rate:
Income other than dividend: 40%
Dividend income: 32.5%
£32,001 - £150,000
Additional rate:
Income other than dividend: 45%
Dividend income: 38.1%
Over £150,000


Capital Gains Tax:

The annual exemption for 2017/2018 is £11,300 for individuals.

New rates apply on disposals (after 6th April 2016) but they do not apply to disposals of residential properties.

From 6 April 2017 Capital gains tax Capital gains tax on residential property and carried interest
Basic rate 10% 18%
Higher and additional rates 20% 28%
Trustees 20% 28%

 

Note: These tables are provided for guidance only.

 

TAX ADVICE WHICH CONTAINS NO INVESTMENT ELEMENT IS NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.