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Private Individuals > Wills and Probate > Tax Rates and Taxable Bands

Tax Rates and Taxable Bands

Income Tax

Income Tax rates and Taxable Bands:

  2012-13 2013-14 2014-15
Starter rate for savings: 10%* £0-£2,710 £0-£2,790 £0-£2,880
Basic rate: 20% £0-£34,370 £0-£32,010 £0-£31,865
Higher rate: 40% £34,371-£150,000 £32,011-£150,000 £31,866-£150,000
Addional rate: 50% Over £150,000 N/A N/A
45% from 6 April 2013 N/A Over £150,000 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:

  2012-13 2013-14 2014-15
Personal Allowance[1] £8,105 N/A N/A
Personal Allowance for people born after 5 April 1948[1] N/A £9,440 £10,000
Income limit for Personal Allowance £100,000 £100,000 £100,000
Personal Allowance (people aged 65-74) [1][2] £10,500 N/A N/A
Personal Allowance for people born between 6 April 1938 and 5 April 1948 [1][2] N/A £10,500 £10,500
Personal Allowance (people aged 75 and over) [1][2] £10,660 N/A N/A
Personal Allowance for people born before 6 April 1938 [1][2] N/A £10,660 £10,660
Maximum amount of Married Couple's Allowance (born before 6th April 1935) [2][3] £7,705 £7,915 £8,165
Income limit for age related allowances £25,400 N/A N/A
Income limit for the allowances for those born before 6 April 1948 N/A £26,100 £27,000
Minimum amount for Married Couple's Allowance £2,960 £3,040 £3,140
Blind Person's Allowance £2,100 £2,160 £2,230

[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 or date of birth.

[2]These allowances reduce where the income is above the income limit by £1 for every £2 of income above the limit. This applies until the level of the personal allowance for those aged under 65, or from 2013-14, for those born after 5 April 1948, is reached. For married couples allowance this applied until it reaches the minimum amount

[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:

  • 18 per cent and 28 per cent tax rates for individuals (the tax rate you use depends on the total amount of your taxable income, so you need to work this out first)
  • 28 per cent for trustees or for personal representatives of someone who has died
  • 10 per cent for gains qualifying for Entrepreneurs' relief
2011-15
  • 18 per cent and 28 per cent tax rates for individuals (the tax rate you use depends on the total amount of your taxable income, so you need to work this out first)
  • 28 per cent for trustees or for personal representatives of someone who has died
  • 10 per cent for gains qualifying for Entrepreneurs' relief

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 2012-13 2013-14 2014-15
Individuals, personal representatives and trustees for disabled people £10,600 £10,900 £11,000
Other trustees £5,300 £5,450 £5,500

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.