Income tax – bands
|Rate||Tax Band||Income tax rate||Dividend tax rate|
|Starting Rate for Savings||£0 – £5,000||0%||N/A|
|Basic rate||£0 – £33,500||20%||7.5%|
|Higher Rate||£33,501 – £150,000||40%||32.5%|
Higher rate threshold (standard personal allowance + basic rate band) is £45,000.
Non-savings income uses up the starting rate for savings.
Capital gains tax (CGT)
CGT is charged on any profits (the ‘gains’) you make when you sell (or transfer) shares and unit trusts or other assets such as a second home. If the total of any gains realised in the year, minus any losses, exceeds your annual allowance the excess is liable to CGT.
CGT has a different tax rate depending upon whether it applies to business assets or non-business assets.
Annual capital gains tax allowance: £11,300 2017/18
2017/18 Capital gains tax rates (non-business assets)
|Capital gains||Tax rate|
|Gains which when added to taxable income fall in the basic rate tax band||10%|
|Gains which when added to taxable income fall in the higher or additional rate tax band||20%|
Capital gains on residential property which is not a main residence will be taxed at 18% and 28% instead of 10% and 20%.
Inheritance tax (IHT)
Announced IHT rates until 2020/21
|Value of estate||Tax rate|
|£1 – £325,000 (known as IHT threshold or nil rate band)||0%|
|Tax year||Residence nil rate band|
Stamp duty reserve tax (SDRT)
0.5% rounded up to the nearest penny when you buy shares that settled via electronic paperless system.
Standard stamp duty
When you buy shares worth over £1,000 that settle via a paper system the tax charge is 0.5% rounded up to the nearest penny. There is no charge if the shares are worth less than £1,000.
Stamp duty land tax (SDLT) – residential
Charged when you buy residential land or property.
|Purchase price or value||Tax rate paid on portion of purchase price||Tax rate paid on second and subsequent houses|
|Up to £125,000||0%||3%|
|£125,001 to £250,000||2%||5%|
|£250,001 to £925,000||5%||8%|
|£925,001 to £1,500,000||10%||13%|
Historic Personal allowances and reliefs
|Aged under 65*||11,500||11,000||10,600||10,000|
|Born between 6 April 1938 and 5 April 1948||–||–||–||10,500|
|Aged 75 & over||–||–||–||–|
|Born before 6 April 1938||–||–||10,660||10,660|
|Blind person’s allowance||2,320||2,290||2,290||2,230|
|Transferable tax allowance (for married couples and civil partners )**||1,150||1,100||1,060||–|
|Married couples allowance (MCA)|
|Born before 6 April 1935
|Age allowance limit
MCA reduced by £1 for every £2 exceeding limit
|Rent a room relief||7,500||4,250||4,250|