|Income tax rates||Note||2015/16||2014/15|
|Basic rate band – income up to||£31,785||£31,865|
|Starting rate for savings||*0%||*10%|
|Dividend ordinary rate||10%||10%|
|Higher rate – income over||£31,785||£31,865|
|Dividend upper rate||32.5%||32.5%|
|Additional rate – income over||£150,000||£150,000|
|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|
|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%|
|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 after 5 April 1938 and before 6 April 1948||1,3||£10,500||£10,500|
|Born before 6 April 1938||1,3||£10,660||£10,660|
|Blind person’s allowance||£2,290||£2,100|
|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|
|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|
|Rent a Room – exempt on gross annual rent up to||£4,250||£4,250|
- The higher rates of personal allowances are reduced by £1 for each £2 of excess income over £27,000 (£26,100) 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 £3,040. (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.