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Income Tax

Income tax rates Note 2013/14 2012/13
Basic rate band - income up to £32,010 £34,370
  Starting rate for savings *10% *10%
  Basic rate 20% 20%
  Dividend ordinary rate 10% 10%
Higher rate - income over £32,010 £34,370
  Higher rate 40% 40%
  Dividend upper rate 32.5% 32.5%
Additional rate - income over £150,000 £150,000
  Additional rate 45% 50%
  Dividend additional rate 37.5% 42.5%
* Starting rate is for savings income up to the starting rate limit of £2,790 (£2,710) within the basic rate band. The rate applies to any balance of the limit remaining after allocating taxable non-savings income.    
Trusts    
For interest in possession trusts on all income, and other trusts on the first £1,000 of income ("standard rate band"):    
dividend ordinary rate 5 10% 10%
savings income 5 20% 20%
other income 5 20% 20%
Income of other trusts above £1,000 is taxed at the special trust rates:    
rate applicable to trusts   45% 50%
dividend trust rate   37.5% 42.5%
Personal allowance (PA)    
Born after 5 April 1948 / under 65 1,4 £9,440 £8,105
Born after 5 April 1938 and before 6 April 1948 / 65-74 1,2,4 £10,500 £10,500
Born before 6 April 1938/ 75 and over 1,2,4 £10,660 £10,660
Blind person's allowance   £2,160 £2,100
Married couple's allowance (MCA)    
Either partner born before 6 April 1935 (relief restricted to 10%) 1,3,4 £7,915 £7,705
Tax Shelters    
Venture Capital Trust (VCT) up to £200,000 £200,000
Enterprise Investment Scheme (EIS) up to £1,000,000 £1,000,000
Seed Enterprise Investment Scheme up to £100,000 £100,000
Golden Handshake max. £30,000 £30,000
Rent a Room - exempt on gross annual rent up to £4,250 £4,250
Construction Industry Scheme deduction rate:    
Standard (registered) 20% 20%
Higher (not registered) 30% 30%

 

Notes

 

  1. Ages are as the end of the tax year.
  2. The higher rates of personal allowances are reduced by £1 for each £2 of excess income over £26,100 (£25,400) until the basic allowance is reached.
  3. Similar limits apply to the married couple's allowance. The reduction in allowance is subject to a minimum level of £3,040. (For couples married before 5 December 2005, only the husband's income is taken into account. For those married on or after 5 December 2005 or in a civil partnership, only the higher earner’s income is taken into account).
  4. The personal allowance, including the minimum age-related allowance, is reduced by £1 for every £2 that net adjusted income exceeds £100,000.
  5. Where there are several trusts created by the same settlor, the "standard rate band" is divided equally between them, subject to a minimum band of £200 for each trust.

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