Personal Savings Allowance – Basic Rate Taxpayers
Personal Savings Allowance – Higher Rate Taxpayers
£1,000
£500
N/A
N/A
Income Limit for Personal Allowance (2)
£100,000
£100,000
£100,000
Income limit for age-related allowances (Married Couples Allowance from 2016/17) (3)
£27,700
£27,700
£27,000
Blind Person’s allowance
£2,290
£2,290
£2,230
Married Couple’s allowance (2) (4)
£8,355
£8,355
£8,165
Transferable Tax Allowance for married couples and civil partners (5)
£1,100
£1,060
N/A
Dividend allowance (6)
£5,000
N/A
N/A
Rent a room limit
£7,500
£4,250
£4,250
From 2016-17 onwards, all individuals will be entitled to the same personal allowance, regardless of the individuals' date of birth.
The personal allowance is reduced by £1 for every £2 of income in excess of the £100,000 limit irrespective of date of birth.
Allowances for individuals born before 6 April 1948 reduce by £1 for every £2 of income in excess of the income limit, reducing to the standard personal allowance (£11,000). Such allowances can be reduced further under (2).From 2016-17 the only age-related allowances will be married couples allowance see (1)
The relief is limited to 10% and can only be claimed if at least one spouse was born before 6 April 1935. The allowance is reduced where income exceeds the age related income limit, down to a minimum of £3,220 2016/2017 (£3,220 2015/2016). Please note the allowance extends to Civil Partnerships.
Available to those born after 5 April 1935. 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.
From April 2016, the new Dividend Allowance means that individuals will not have to pay tax on the first £5,000 of dividend income they receive.
Tax bands and corresponding tax rates
2016/17
2015/16
2014/15
Starting Rate for savings income (1)
0%
0%
10%
Basic Rate
20%
20%
20%
Higher Rate
40%
40%
40%
Additional Rate
45%
45%
45%
Dividend ordinary rate - otherwise taxable at basic rate (effective rate with tax credit)(2)
7.5%
10% (0%)
10% (0%)
Dividend upper rate - otherwise taxable at higher rate (effective rate with tax credit)(2)
32.5%
32.5% (25%)
32.5% (25%)
Dividend additional rate - otherwise taxable at additional rate (effective rate with tax credit)(2)
38.1%
37.5% (30.6%)
37.5% (30.6%)
Starting Rate limit (Savings income) (1)
£5,000
£5,000
£2,880
Basic Rate
£5,001 - £32,000
£5,001 - £31,785
£2,881 - £31,865
Higher Rate
£32,001 - £150,000
£31,786 - £150,000
£31,866 - £150,000
Additional Rate
Over £150,000
Over £150,000
Over £150,000
From 2008-09 there has been a starting rate for savings income only. If an individual’s taxable non-savings income exceeds the starting rate limit, then the starting rate for savings will not be available for savings income.
From April 2016 the dividend tax credit will be abolished and replaced with a new £5,000 Dividend Allowance
Took effect from 1 July 2014, between 2 April and 30 June 2014 the total annual subscription limit for 2014/15 was £11,880 of which up to £5,940 could be placed in a cash ISA.
Took effect from 1 July 2014, Between 2 April and 30 June 2014 the junior ISA and CTF annual subscription limit for 2014/15 was £3,840.
(3) HMRC will uplift 25% of contributions into the ISA for first time buyers, so for every £200 paid in HMRC will add £50.
Tax relief is given for pension contributions up to the lower of 100% of earnings or the maximum contribution. The maximum contribution is the annual allowance plus unutilised annual allowances from the three previous years. Up to £3,600 may be contributed to a pension irrespective of earnings.
For 2016/17 annual allowance reduced by £1 for every £2 income over £150,000 to a minimum of £10,000.
