| 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 are reduced by £1 for every £2 of excess income over £27,700 (£27,000) until the basic allowance is reached for those born before 6 April 1938 (6 April 1948).
- The allowance for a married couple is subject to similar restrictions. The allowance reduction is subject to a minimum of £3,220. (For couples married before 5 December 2005, only the husband’s income is considered.) Only the higher earner’s income is considered for those married on or after 5 December 2005, or in a civil partnership).
- Regardless of the individual’s date of birth, the personal allowance, including the minimum age-related allowance, is reduced by £1 for every £2 that adjusted net income exceeds £100,000.
- The same settlor establishes several trusts. The “standard rate band” is divided equally, with a £200 minimum band for each trust.
- Spouses/civil partners born after 5 April 1935 are eligible. For those born after 5 April 1938, the allowance is 10% of the personal allowance. It allows a spouse or civil partner who is not subject to income tax at rates higher than the basic rate to transfer this portion of their allowance to their spouse/civil partner. The recipient must not be subject to taxation over the basic rate. The recipient is entitled to a tax break equal to 20% of the transferred amount.