Personal tax rates
Find here UK Income Tax rates and Personal Allowances.
Personal tax rates for UK taxpayers: if you have income arising in the UK, you may be subject to these rates on tax payable in the UK
Find here the UK Income Tax rates and Personal Allowances, including: tax free Personal Allowance, Income Tax Rates, Capital Gains Tax (CGT).
Please note that the rates shown on this pages only apply to residents of England, Wales and Northern Ireland, and to all non-residents. The rates shown on this page do not apply to residents of Scotland.
Find here the UK Income Tax rates and Personal Allowances, including: tax free Personal Allowance, Income Tax Rates, Capital Gains Tax (CGT).
Starting Rate for Savings
- You may get up to £5,000 of interest tax-free. This is your starting rate for savings.
- The more you earn from other income (for example your wages or pension), the less your starting rate for savings will be.
- You are not eligible for the starting rate for savings if your other income is £17,570 (£17,500 for 2020-21) or more.
- Your starting rate for savings is a maximum of £5,000. Every £1 of other income above your Personal Allowance reduces your starting rate for savings by £1.
Personal Savings Allowance
You may also get up to £1,000 of interest tax-free depending on which Income Tax band you are in. This is your Personal Savings Allowance.
| Personal Savings Allowance | 2020-21 | 2021-22 |
|---|---|---|
| Basic rate | £1,000 | £1,000 |
| Higher rate | £500 | £500 |
| Additional rate | £0 | £0 |
Personal Allowance (tax-free)
The standard Personal Allowance is the amount of income on which you do not have to pay tax.
| Personal Allowance | 2020-21 | 2021-22 |
|---|---|---|
| Personal Allowance (if available) | £12,500 | £12,570 |
| Transferable Tax Allowance (Marriage Allowance) | £1,250 | £1,257 |
Income Tax Rates
The table shows the tax rates you pay in each band if you have a standard Personal Allowance (as per the above table).
| Income Tax Rates | 2020-21 | 2021-22 |
|---|---|---|
| Basic Rate Band | £37,500 | £37,700 |
| Basic Rate | 20% | 20% |
| Higher Rate (for income in excess of the Personal Allowance plus Basic Rate Band) | 40% | 40% |
| Additional Rate (where income exceeds £150,000) | 45% | 45% |
| Dividend Ordinary Rate | 7.50% | 7.50% |
| Dividend Upper Rate | 32.50% | 32.50% |
| Dividend Additional Rate | 38.10% | 38.10% |
| Rent a Room Relief | £7,500 | £7,500 |
| Property Allowance | £1,000 | £1,000 |
- Where an individual’s non-savings income is less than the starting rate for savings limit, the savings income will be taxable at the 0% starting rate for savings up to the limit. From 6th April 2019 the Starting Rate for Savings limit is the individual’s Personal Allowance plus the Starting Rate band of £5,000.
- Where an individual’s non-savings income exceeds the Starting Rate for Savings limit, the Starting Rate for Savings is reduced by £1 for every £1 of other income over the Personal Allowance.
- The first £2,000 of dividend is tax-free. The rate of tax applicable to dividends in excess of this amount is 7.5%/32.5%/ or 38.1% depending on the level of other income.
- For those with income over £100,000 the Personal Allowance is reduced by £1 for every £2 that the taxable income is in excess of £100,000.
- The rate of Income Tax applicable to trusts is 45% (dividend income 38.1%).
Capital Gains Tax (GCT)
Capital Gains Tax is a tax payable on the profit of the disposal of an asset that has increased in value.
| Capital Gains Tax (CGT) | 2020-21 | 2021-22 |
|---|---|---|
| Individuals Annual Exemption | £12,000 | £12,300 |
| Trusts Annual Exemption (generally) | £6,000 | £6,150 |
| Gains from residential property | 20% / 28% | 20% / 28% |
| All other gains | 10% / 20% | 10% / 20% |
- Gains that when added to an individuals other income are within the Basic Rate Band will be taxed at the lower rate(s) and all other gains will be taxed at the Higher Rates.
- Special rules apply on disposals of leasehold interests of less than 50 years.
- The gain arising during a period when the property was the taxpayer’s Principal Private Residence is exempt and the last nine months of ownership (2020-21 – eighteen months) are deemed to be an additional period of Principal Private Residence.
- If a Principal Private Residence has at some time been a let property, then the gain arising in the period when the property was let may be reduced by the lettings relief capped at £40,000. Lettings relief will only apply where the owner is sharing occupancy of the home with the tenant(s) under the same roof.
- From 27th October 2021 all disposals of residential property must be reported and the tax paid within 60 days (previously 30 days) of the completion of the transaction.
Annual Tax on Enveloped Dwellings (ATED)
Applies to residential properties held by non-natural persons and is subject to numerous exemptions and reliefs.
| Property value | 2020-21 | 2021-22 |
|---|---|---|
| £0 – £500K | N/A | N/A |
| £500K – £1m | £3,650 | £3,700 |
| £1m – £2m | £7,400 | £7,500 |
| £2m – £5m | £24,800 | £25,300 |
| £5m – £10m | £57,900 | £59,100 |
| £10m – £20m | £116,110 | £118,600 |
| Over £20m | £232,350 | £237,400 |
- For 2020-21 (and the next two years) the bands are bands of value as at 1st April 2017.
For example if the house was worth £1.9m in April 2012, the 2017-18 tax would be £7,050; if the same house had gone up in value since 2012 and was worth £2.1m as at 1st April 2017, then the tax for 2020-21 would be £25,200. That is because they are valued once every five years. - There are numerous reliefs including where the property has been let commercially. To claim a relief the owner MUST claim this relief on a full ATED return, which must be submitted annually.
Stamp Duty Land Tax (SDLT)
- Special rates apply to purchases in Scotland and Wales. The following apply to England and Northern Ireland only.
- Most purpose-built student accommodation, hotel rooms and care home rooms are treated as commercial property.
- Special rates (not included here) apply to the purchase of a new lease.
Residential property
| Purchase of the first or main property by an individual | SDLT rate |
|---|---|
| Up to £125,000 | 0% |
| Excess over 125,001 up to £250,000 | 2% |
| Excess over £250,001 up to £925,000 | 5% |
| Excess over £925,001 up to £1,500,000 | 10% |
| Excess over £1,500,001 | 12% |
- All purchases of second or additional properties are subject to a surcharge of 3%.
- From 1st April 2021 all purchases of residential property by a non-resident are subject to a surcharge of 2%.
- A reduction in SDLT is applicable to first-time buyers.
| Purchase of a second or additional property subject to ATED | SDLT rate |
|---|---|
| The rate applies to the whole of the consideration where the purchaser is not an individual and the consideration exceeds £500,000 | 15% |
- For residential properties to which ATED applies the rate of SDLT is 15% on the whole value.
- Company purchases of residential properties for more than £500,000 are subject to SDLT at 15%. However, if the company is to use the property in a rental business, the reduced rates apply.
The following table applies to:
- Non-residential freehold property
- Six or more residential properties bought in a single transaction
- Leasehold property (applies to lease premiums or transfer value)
| Purchase price or value of rent | SDLT rate |
|---|---|
| Up to £150,000 | 0% |
| The next £100,000 (the portion from £150,001 to £250,000) | 2% |
| The remaining amount (the portion above £250,000) | 5% |
Inheritance Tax (IHT)
Inheritance Tax is a tax on the estate (the property, money and possessions) of someone who has died.
| Inheritance Tax (IHT) | 2020-21 | 2021-22 |
|---|---|---|
| £NIL band rate | £325,000 | £325,000 |
| Residence £NIL band rate | £150,000 | £175,000 |
| Lifetime transfers in excess of £325,000 | 20% | 20% |
| Rate of tax on the excess over the £NIL band rate | 40% | 40% |
- Chargeable transfers are aggregated. Lifetime transfers in excess of £325,000 are taxed at 20%. On death the rate on the excess of an estate over £325,000 is 40%. A tapered rate is applied to transfers made between three and seven years before death.
- The first £325,000 is called the £NIL band rate.
- Between husband and wife, the surviving spouse may use any part of the £NIL Rate Band that was not used on the first death. Transfers between husband and wife who are both UK domiciled or both non-UK domiciled are exempt.
- The £NIL band rate is increased to accommodate the transfer of the family home to a descendant, with restrictions on estates worth over £2,000,000. The increase is being introduced gradually and by 2020-21 it will be £175,000 per person.
- Small gifts made out of income are exempt.
- Inheritance Tax applies to certain trusts and is payable at a (very) reduced rate every tenth year and on exit. Contact us for details.
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