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Tax Rates Changes

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

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 £2,290
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 2016/2017 is £11,100 for individuals

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

From 6 April 2016 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.

Source: HM Revenue & Customs Tax Tables

 

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