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Tax Rates 2017 — 2018

Income Tax Rates

Rate on taxable income Tax Band Income Tax Rate Dividend Tax Rate
Starting savings rate  0 – £5,000 0%
Basic rate  Up to £33,500 20% 7.50%
Higher rate  £33,501 – £150,000 40% 32.50%
Additional rate  over £150,000 45% 38.1%

 

Income Tax Allowances

Personal allowance £11,500
Income limit for personal allowance £100,000
Income Limit for married couple’s allowance £28,000
Marriage allowance £1,150
Married couple’s allowance before 6 April 1935
Married couple’s allowance maximum amount £8,445
Married couple’s allowance minimum amount £3,260
Blind person’s allowance £2,320
Dividend allowance £5,000
Personal savings allowance for basic rate taxpayers £1,000
Personal savings allowance for higher rate taxpayers £500

 

National Insurance Contributions

Weekly earnings £(GBP)
Class I (employment) Employee’s rate
Below £157 0%
£157 to £866 12%
Above £866 2%
Employment allowance, per employer, per year £3,000
Employer’s rates
Below £156 0%
Above £156 13.8%
Class 2
Annual small earning exception £6,025
Class 2 rate per week £2.85
Class 4
Lower annual earnings limit £8,164
Upper annual earnings limit  £45,000
Class 4 rate between lower and upper earnings limit 9%
Class 4 rate above upper earnings limit 2%

 

Capital Gains Tax

Annual exemption individual £11,300
Annual exemption Trustees £5,650
Higher rate taxpayers 20%/28%*
Standard rate taxpayers 10%/18%*
Rates for trustees and personal representatives of someone who has died 20%
Entrepreneurs’ rate 10%
Entrepreneurs’ relief life time limit £10,000,000

*18% and 28% tax rates for individuals for residential property and carried interest

 

Individual Savings Accounts (ISAs)

Maximum annual investment limit – a combination of amounts between a Cash and Stocks and Shares NISA £20,000

 

Stamp Duty

From 4 December 2014, the SDLT rates were changed by a new regime under which you only pay the rate of tax on the part of the property price within each tax band

  Residential property1,2
Standard rate Additional or rental rate (from 1 April 2016)
Value up to £40,000 0% 0%
Over £40,000 to £125,000 0% 3%
Over £125,000 – £250,000 2% 5%
Over £250,000 – £925,000 5% 8%
Over £925,000 – £1,500,000 10% 13%
Over £1,500,000 12% 15%

Lease rentals (on grant): The net present value is charged at 1% on the excess over £125,000 for residential property

1The threshold for properties in disadvantaged areas is £150,000

2 15% rate applies to properties over £500,000 purchased on or after 20 March 2014 by ‘non-natural persons’, such as a company

Non-residential or mixed use1, 2
Value up to £150,000 or annual rent less than 1,000 0%
Over £150,000 – £250,000 2%
Over £250,000 5%
Shares and Securities Standard rate – 0.5%, higher rate – 1.5%

Lease rentals (on grant): The net present value is charged 1% on the excess over £150,000 for non-residential or mixed use, land.

1 Special rules apply to stamp duty land tax on premiums where the annual rent exceeds £1,000

2 2% surcharge on stamp duty and tax rates on commercial property with a net present value over £5 million

 

Capital Allowances

Annual investment allowance limit from 1 January 2016 £200,000
First year allowance (FYA) for business expenditure on new low rate (110g/km) emission vehicles 100%
Writing down allowances
Integral features and long-life assets 8%
Other plant and machinery 18%
Cars with emissions less than or equal to 75g/km 100%
Cars with emissions between 76g/km and 130g/km 18%
Cars with emissions over 130g/km 8%

 

Annual Tax on Enveloped Dwellings

Property value Charge
£500,000 to £1m £3,500
£1 million to £2 million £7,050
£2 million to £5 million £23,550
£5 million to £10 million £54,950
£10 million to £20 million £110,100
Over £20 million £ 220,350

Disposal of ATED property gains are subject to 28% capital gain tax.

 

Corporation Tax

Corporation tax Rate
Main rate 19%

 

VAT

Standard Rate 20%
Reduced Rate 5%
Zero Rate 0%
Taxable turnover limits
Annual limit for registration (last 12 months or if turnover is going to exceed within the next 30 days) £ 85,000
Annual de-registration limit £ 83,000
Cash and annual accounting scheme turnover limit £ 1.35m
Optional flat rate scheme £ 150,000

There is no registration threshold for non-UK established businesses making taxable supplies in the UK.

 

Inheritance Tax

Inheritance tax threshold £325,000*
Residential additional threshold £100,000
Standard inheritance tax rate 40%
Lower rate when 10% or more of estate is left to a charity 36%
Annual Exemption
Annual gifts £3,000
Small gifts £250
Wedding gifts to each of your children £5,000
Wedding gifts to each grandchild 2,500
Wedding gifts to others £1,000

*If you’re married or in a civil partnership and your estate is worth less than your threshold, any unused threshold can be added to your partner’s threshold when you die. This means their threshold can be as much as £850,000.

 

Non-Domiciled Remittance Basis Charges (RBC)

Unremitted income less than 2,000 0%
Resident in the UK for more than 7 of previous 9 tax years £30,000
Resident in the UK for more than 12 of previous 14 tax years £60,000
Resident in the UK for more than 17 of previous 20 tax years £90,000
Personal allowance 0%
Capital Gains Tax Annual Exemption 0%
Capital gain Tax rate 18%/28%

 

Pension Schemes Allowance

Annual Allowance £40,000
Lifetime Allowance £1m
Annual allowance charge on excess 20 – 45 %

 

Tax efficient Savings and Investment

Venture capital trust limit £200,000
Venture capital trust relief 30%
Seed enterprise investment scheme relief limit £100,000
Seed enterprise investment scheme relief 50%
Enterprise investment scheme relief limit £1m
Enterprise investment scheme income tax relief 30%
Social investment tax relief limit £1m

 

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