Tax rates and allowances

Income tax

Personal allowances and reliefs

2016/17 2015/16 2014/15 2013/14 2012/13 2011/12 2010/11 2009/10
Personal allowance £ £ £ £ £ £
Aged under 65* 11,000 10,600 10,000 9,440 8,105 7,475 6,475 6,475
Born between 6 April 1938 and 5 April 1948 11,000 10,600 10,500 10,500
Aged 65–74  –  – 10,500 9,940 9,490 9,490
Aged 75 & over 10,660 10,090 9,640 9,640
Born before 6 April 1938  11,000 10,660 10,660 10,660
Blind person’s allowance 2,290  2,230 2,160 2,100 1,980 1,890 1,890
Transferable personal allowance (to spouse)** 1,060
Married couples allowance (MCA)
75 and older

Max

Min

8,355

3,220

 8,165

3,140

7,915

 

7.705

 

7,295

 

6,965

 

6,965

 

Age allowance limit

MCA reduced by £1 for every £2 exceeding limit

 27,700  27,000 26,100 25,400 24’000 22,900 22,900
Rent a room relief  7,500  4,250  4,250 4,250 4,250 4,250 4,250 4,250

*Personal allowance restriction from 2010/11 on
The personal allowance is restricted by £1 for every £2 of an individual’s adjusted net income above £100,000.

** Tranferable allowance: a spouse or civil partner who is not liable to income tax above the basic rate may transfer £1,060 of their unused personal allowance to their spouse/civil partner, provided that the recipient of the transfer is not liable to income tax above the basic rate. Taxpayers have 4 years in which to make the election.

Income tax rates

Rate % 2016/17 2015/16  2014/15 2013/14 2012/13 2011/12 2010/11 2009/10 2008/09
Basic* 20% £0 -£32,000 £0 – £31,785 £0 to £31,865 £0 to £32,010 £0 to £34,370 £0 to £35,000 £0 to £37,400 £0 to £37,400 £0 to 34,600
Higher 40% £32,000 to £150,000 £31,786 to £150,000 £31,866 to £150,000 £32,011 to £150,000 £34,370 to £150,000 £35,001 to £150,000 £37,401 to £150,000 37,401 and above 34,601 and above
Top 45% £150,000 + £150,000 + £150,000 + £150,000 + n/a n/a
Top 50% £150,000 + £150,000 + £150,000 + n/a n/a

 

*Starting rate band:

a starting rate applies to savings income up to:

  • £5,000 2015/16 – rate 0%
  • £2,880 2014/15 – rate 10%
  • £2,790 2013/14   ” “
  • £2,710 2012/13   ” “
  • £2,560 2011/12   ” “
  • £2,440 2010/11   ” “
  • £2,320 2008/09 to 2009/10  ” “

This band is not available if taxable non-savings income also exceeds this band. See Tax on interest for worked examples.

Note restriction on personal allowances when income is in excess of £100,000 from 2010/11 on.

Child benefit claimants

Commencing on 7 January 2013 the High Income Child Benefit Tax Charge provisions will claw back Child Benefit payments when a claimant or their partner’s income exceeds £50,000.

Tax rate & effective tax rate on dividends

Rate 2013/14 to 2015/16  2012/13 2011/12 2010/11 2009/10 2008/09
Top tax rate 45% 50% 50% 50% 40% 40%
Dividend rate 37.5% 42.50% 42.50% 42.5% 32.5% 32.5%
Effective rate* 30.55% 36.11% 36.11% 36.11% 25% 25%
Higher tax rate 40% 40% 40% 40%
Dividend rate 32.5% 32.5% 32.5% 32.5%
Effective rate* 25% 25% 25% 25%

* For example: if an individual who is a top rate tax payer receives a dividend of £20,000 in 2013/14 (dividends are paid net of 10% tax), he will face a tax liability of £6,111 on the net dividend.

Special rates for trustees income

Rate 2013/14 to 2015/16 2012/13
Standard rate on first £1,000 of income which would otherwise be taxed at the special rate for trustees Up to 20% depending on type of income Up to 20% depending on type of income
Trust rate 45% 50%
Dividend trust rate 37.5% 42.5%

 

Pensions – higher rate restrictions

Contribution limits From 2014/15 on 2011/12 to 2013/14 To 2010/11
Annual allowance £40,000 £50,000 £215,000
Lifetime allowance £1.25 million £1.5 million £1.8 million

 

Leave a Reply

Your email address will not be published.