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Income Tax

Income tax rates

Note

2015/16

2014/15

Basic rate band - income up to

£31,785

£31,865

  Starting rate for savings income

*0%

*10%

  Basic rate

20%

20%

  Dividend ordinary rate

10%

10%

Higher rate - income over

£31,785

£31,865

  Higher rate

40%

40%

  Dividend upper rate

32.5%

32.5%

Additional rate - income over

£150,000

£150,000

  Additional rate

45%

45%

  Dividend additional rate

37.5%

37.5%

Starting rate limit (savings income)

*£5,000

*£2,880

* If an individual's taxable non-savings income exceeds the starting rate limit, then the starting rate will not be available for savings income

Trusts

For interest in possession trusts on all income, and other trusts on the first £1,000 of income ("standard rate band"):

dividend ordinary rate

4

10%

10%

savings income

4

20%

20%

other income

4

20%

20%

Income of other trusts above £1,000 is taxed at the special trust rates:

rate applicable to trusts

45%

45%

dividend trust rate

37.5%

37.5%

Personal allowance (PA)

Born after 5 April 1948

3

£10,600

£10,000

Born between 6 April 1938 and 5 April 1948

1,3

£10,600

£10,500

Born before 6 April 1938

1,3

£10,660

£10,660

Blind person's allowance

£2,290

£2,230

Married couple's allowance (MCA)

Either partner born before 6 April 1935 (relief restricted to 10%)

2,3

£8,355

£8,165

Transferable tax allowance

For certain married couples and civil partners born after 5 April 1935 (relief 20%)

5

£1,060

Tax Shelters

Venture Capital Trust (VCT) up to

£200,000

£200,000

Enterprise Investment Scheme (EIS) up to

£1,000,000

£1,000,000

Seed Enterprise Investment Scheme up to

£100,000

£100,000

Social Investment Tax Relief

£1,000,000

£1,000,000

Golden Handshake max.

£30,000

£30,000

Notes

  • Allowances for those born before 6 April 1938 (6 April 1948) are reduced by £1 for each £2 of excess income over £27,700 (£27,000) until the basic allowance is reached.
  • Similar limits apply to the married couple's allowance. The reduction in allowance is subject to a minimum level of £3,220. (For couples married before 5 December 2005, only the husband's income is taken into account. For those married on or after 5 December 2005 or in a civil partnership, only the higher earner’s income is taken into account).
  • The personal allowance, including the minimum age-related allowance, is reduced by £1 for every £2 that adjusted net income exceeds £100,000 regardless of the individual's date of birth.
  • Where there are several trusts created by the same settlor, the "standard rate band" is divided equally between them, subject to a minimum band of £200 for each trust.
  • Available to spouses/civil partners born after 5 April 1935. The allowance is 10% of the personal allowance for those born after 5 April 1938. It allows a spouse or civil partner who is not liable to income tax above the basic rate to transfer this amount of their personal allowance to their spouse/civil partner. The recipient must not be liable to tax above the basic rate. The recipient is eligible to a tax reduction at 20% of the transferred amount.