Tax Rates and Taxable Bands
Income Tax
Income Tax rates and Taxable Bands:
| 2011-12 | 2012-13 | 2013-14 | |
|---|---|---|---|
| Starter rate for savings: 10%* | £0-£2,560 | £0-£2,710 | £0-£2,790 |
| Basic rate: 20% | £0-£35,000 | £0-£34,370 | £0-£32,010 |
| Higher rate: 40% | £35,001-£150,000 | £34,371-£150,000 | £32,011-£150,000 |
| Addional rate: 50% | Over £150,000 | Over £150,000 | N/A |
| 45% from 6 April 2013 | N/A | N/A | Over £150,000 |
* From 2008-09 there is a 10 per cent starting rate for savings income only. If your non-savings income is above this limit then the 10 per cent starting rate for savings will not apply.
The rates available for dividends are the 10 per cent ordinary rate and the 32.5 per cent dividend upper rate and the dividend additional rate of 42.5 per cent (the dividend additional rate is 37.5 per cent from 2013-14).
Income Tax allowances:
| 2011-12 | 2012-13 | 2013-14 | |
|---|---|---|---|
| Personal Allowance[1] | £7,475 | £8,105 | N/A |
| Personal Allowance for people born after 5 April 1948[1] | N/A | N/A | £9,440 |
| Income limit for Personal Allowance | £100,000 | £100,000 | £100,000 |
| Personal Allowance (people aged 65-74) [1][2] | £9,490 | £10,500 | N/A |
| Personal Allowance for people born between 6 April 1938 and 5 April 1948 [1][2] | N/A | N/A | £10,500 |
| Personal Allowance (people aged 75 and over) [1][2] | £10,090 | £10,660 | N/A |
| Personal Allowance for people born before 6 April 1938 [1][2] | N/A | N/A | £10,660 |
| Married Couple's Allowance (born before 6th April 1935 and aged 75 and over) [2][3] | £7,295 | £7,705 | £7,915 |
| Income limit for age related allowances | £24,000 | £25,400 | N/A |
| Income limit for the allowances for those born before 6 April 1948 | N/A | N/A | £26,100 |
| Minimum amount for Married Couple's Allowance | £2,800 | £2,960 | £3,040 |
| Blind Person's Allowance | £1,980 | £2,100 | £2,160 |
[1]The Personal Allowance reduces where the income is above £100, 000 - by £1 for every £2 of income above the £100,000 limit. This reduction applies irrespective of age.
[2]These allowances reduce where the income is above the income limit by £1 for every £2 of income above the limit. The Personal Allowance for people aged 65 and over (up to and including 2012-13) and born before 6 April 1948 (from 2013-14) can be reduced below the basic Personal Allowance where the income is above £100,000.
[3]Tax relief for the Married Couple's Allowance is given at the rate of 10 per cent.
Capital Gains Tax
Each tax year nearly everyone who is liable to Capital Gains Tax gets an annual tax-free allowance - known as the 'Annual Exempt Amount'. You only pay Capital Gains Tax if your overall gains for the tax year ( after deducting any losses and applying any reliefs) are above this amount.
Rates for Capital Gains Tax:
| Tax Year | Rate |
|---|---|
| 2010-11 |
For gains on or before 18th June 2010, Capital Gains Tax is charged at a flat rate of 18 per cent. The following Capital Gains Tax rates apply to gains after this date:
|
| 2011-12 |
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| 2012-13 |
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| 2013-14 |
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Tax-free allowances for Capital Gains Tax
The annual tax-free allowance (known as the Annual Exempt Amount) allows you to make a certain amount of gains each year before you have to pay tax.
Nearly everyone who is liable to Capital Gains Tax gets this tax-free allowance.
There's one Annual Exempt Amount for:
- most individuals who live in the UK
- executors or personal representatives of a deceased person's estate
- trustees for disabled people
Most other trustees get a lower Annual Exempt Amount.
Annual Exempt Amounts:
| Customer Group | 2011-12 | 2012-13 | 2013-14 |
|---|---|---|---|
| Individuals, personal representatives and trustees for disabled people | £10,600 | £10,600 | £10,900 |
| Other trustees | £5,300 | £5,300 | £5,450 |
Executors and personal representatives
If you're acting as an executor or personal representative for a deceased person's estate, you may get the full Annual Exempt Amount during the 'administration period'. The administration period is usually the time it takes to settle the deceased person's affairs and get a grant of probate (or confirmation in Scotland).
You're entitled to the Annual Exempt Amount for the tax year in which the death occurred and the following two tax years. After that there's no tax-free allowance against gains made during the administration period.
Trustees for disabled people
If you're acting as a trustee for a disabled person you use the higher Annual Exempt Amount above - and not the rate for 'other trustees'.
A disabled person in this context is a person who has mental health problems or receives the middle or higher rate of Attendance Allowance or Disability Living Allowance.
Inheritance Tax
When a person dies IHT becomes due on their estate. Some lifetime gifts are treated as chargeable transfers but most are ignored providing the donor survives for seven years after the gift.
The rate of tax on death is 40% and 20% on lifetime chargeable transfers. Lifetime chargeable transfers are a transfer to a company or a trust and are immediately chargeable.
Inheritance Tax thresholds
The Inheritance Tax threshold (or 'nil rate band') is the amount up to which an estate will have no Inheritance Tax to pay.
If the estate - including any assets held in trust and gifts made within seven years of death - is more than the threshold, Inheritance Tax will be due at 40 per cent on the amount over the nil rate band.
Inheritance Tax thresholds:
| From | To | Threshold/nil rate band |
|---|---|---|
| 6 April 2009 | 5 April 2015 | £325,000 |
Reduced Charge on gifts within 7 years of death:
| Years before death | 0-3 | 3-4 | 4-5 | 5-6 | 6-7 |
|---|---|---|---|---|---|
| % of death charge | 100 | 80 | 60 | 40 | 20 |
Reliefs:
- Annual Exemption £3,000
- Small Gifts £250
Stamp Duty on Property
For Residential Property
| Purchase price/lease premium or transfer value | SDLT rate* |
|---|---|
| Up to £125,000 | 0% |
| £125,001 to £250,000 | 1% |
| £250,001 to £500,000 | 3% |
| £500,001 to £1 million | 4% |
| Over £1 million to £2 million | 5% |
| Over £2 million from 22 March 2012 | 7% |
| Over £2 million (purchased by certain persons including corporate bodies) from 21 March 2012 | 15% |
For Non-Residential Land or Property
| Purchase price/lease premium or transfer value | SDLT rate* |
|---|---|
| Up to £150,000 - annual rent is under £1,000 | 0% |
| Up to £150,000 - annual rent is £1,000 or more | 1% |
| Over £150,000 to £250,000 | 1% |
| Over £250,000 to £500,000 | 3% |
| Over £500,000 | 4% |
If the value is above the payment threshold, SDLT is charged at the appropriate rate on the whole of the amount paid. For example, a house bought for £180,000 is charged at 1 per cent, so £1,800 must be paid in SDLT. A house bought for £350,000 is charged at 3 per cent, so SDLT of £10,500 is payable.
* Percentage of the total purchase price
Stamp Duty on Shares
Stamp Duty Reserve Tax
If existing shares are bought through a stockbroker, and the transaction is completed electronically Stamp Duty Reserve Tax applies at a flat rate of 0.5 per cent of share price.
Stamp Duty
If a stock transfer form is used Stamp Duty applies. Same 0.5 per cent rate as Stamp Duty Reserve Tax, but rounded up to the nearest £5 above.
Shares up to £1,000 no stamp duty is payable. Over this rate applies to whole amount. If given the shares no duty applies.
