Tax Thresholds For 6 April 2017 To 5 April 2018

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As we approach one of the busiest times of year in the financial calendar for both individuals and businesses alike, it’s important to ensure we are all making the best use of our available annual allowances when it comes to efficient tax planning.

Below are tables highlighting all the key allowances for the current tax year.

INCOME TAX BANDS AND PERCENTAGES

Band Limits Percentage
Starting Rate (Savings only *) £0 – £5,000 0%*
Basic Rate £0 – £33,500 (£31,500 Scotland) 20%
Higher Rate £33,501 – £150,000 (£31,501 – £150,000 Scotland) 40%
Additional/Top Rate Over £150,000 45%

*0% starting rate is for savings income only – if your non-savings income is above the starting band level, the 0% rate will NOT apply and the basic rate percentage will be used instead.

DIVIDEND TAX BANDS AND PERCENTAGES

Band Limits Percentage
Basic Rate £0 – £33,500 7.5%
Higher Rate £33,501 – £150,000 32.5%
Additional/Top Rate Over £150,000 38.1%

TAX FREE PERSONAL ALLOWANCE

The amount of gross income you can earn before you are liable to paying income tax.

Type Limit
Personal* £11,500
Married Couple’s (aged 82 or over on6 April 2017) ** £8,445
Dividend £5,000
Personal Savings (Basic Rate Taxpayers) £1,000
Personal Savings (Higher Rate Taxpayers) £500
Property*** £1,000
Trading*** £1,000

* Reduced by £1 for each £2 of income (less deductions) in excess of £100,000
** Reduced by £1 for each £2 of income (less deductions) in excess of £28,000. The minimum age-related married couple’s allowance us £3,260
*** New allowances for UK resident taxpayers. Where individuals are in receipt of gross property income or gross trading income below the new allowances, the income will not be subject to income tax. Where gross receipts are above, recipients can choose to take the £1,000 allowance as a deduction against their gross income instead of deducting actual expenses to arrive at their taxable income figure.

INCOME LIMITS FOR TAPERING

The amount of gross income you can have before your personal allowance is reduced.

Income Limit (Born after 5 April 1948) £100,000
Income Limit (Born before 6 April 1948) * £28,000

INCOME TAX RELIEFS AND INCENTIVES

Type Max Investment Percentage of Relief
Enterprise Investment Scheme (EIS) £1,000,000 30%
Seed Enterprise Investment Scheme (SEIS) £100,000 50%
Venture Capital Trust (VCT) £200,000 30%
Individual Savings Account (ISA) £20,000 N/A
Junior ISA £4,128 N/A

CAPITAL GAINS TAX EXEMPTIONS

Type Amount
Individuals, Personal Reps and Trustees for Disable People £11,300
Other Trustees £5,650

CORPORATION TAX

Main Rate 19%

If you would like some advice about using your full annual allowances, please contact your Finura adviser.

The Financial Conduct Authority does not regulate taxation and trust advice.

Sources: https://www.uktaxcalculators.co.uk/tax-rates/2017-2018/
http://ukbudget.com/files/deloitte-uk-tax-rates-2017-18.pdf

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