Tax Rates Changes
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||£3,220|
|Married couples/civil partner at 10% - maximum (2)||£8,355||£8,355||£8,355||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|
2017-2018 are proposed figures and can be subject to change
(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
|Starting rate for savings: 10%*||
|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|
|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|
Income other than dividend: 20%
Dividend income: 7.5%
|0 - £32,000|
Income other than dividend: 40%
Dividend income: 32.5%
|£32,001 - £150,000|
Income other than dividend: 45%
Dividend income: 38.1%
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|
|Higher and additional rates||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.