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Personal Tax

Main personal allowances

2015/16 2014/15
Personal income tax allowance (PA) £10,600 £10,000
PA if born 6.4.38-5.4.48 £10,600 £10,500
PA if born before 6.4.38 10,660 10,660
Marriage allowance (transferable) 1,060 nil
Blind person's allowance 2,290 2,230
Relief at 10% only:
Married couples allowance (MCA) 8,355 8,165
Minimum MCA 3,220 3,140
Age-related allowance income limit 27,700 27,000
Rent-a-room exemption 4,250 4,250

Age allowances

Notes

  1. PA is reduced by £1 for every £2 by which adjusted net income (ANI) exceeds £100,000, so PA is nil when ANI is £121,200.
  2. ANI is total taxable income less qualifying pension contributions and Gift Aid donations.
  3. Marriage allowance is the transferable part of the PA and is available only to married couples and civil partners born after 5 April 1935. It can be transferred to their spouse or civil partner as long as the recipient is not taxed at more than 20%.
  4. Married couples allowance (MCA) depends on age of older spouse and is reduced if marriage or civil partnership took place during the tax year.
  5. Age-related allowances are reduced by £1 for every £2 by which ANI exceeds the age-related income limit. PA is reduced first until it reaches the normal PA; then MCA is reduced until it reaches the minimum.
  6. The Rent-a-room exemption is available where the taxpayer lets out part of the home they live in as furnished residential accommodation.

Income tax bands

  2015/16 2014/15
Savings rate band £5,000 £2,880
Basic rate band (BRB) 31,785 31,865
Higher rate band (HRB) 31,786-150,000 31,866-150,000
Additional rate over 150,000 over 150,000

Notes

  1. Savings band only applies to savings income. If non-savings income exceeds this band, the savings rate (see below) does not apply.
  2. The BRB and additional rate threshold are extended by the grossed-up equivalent of personal pension contributions or Gift Aid donations paid by the taxpayer in the tax year, or treated as paid in the tax year.
  3. Taxable income uses up the rate bands in the following order:

Income tax rates

  • G 'general income' (employment, pensions, business profits, rent)
  • S 'savings income' (mainly interest)
  • D 'dividends' (distributions from companies and most unit trusts)
  2015/16 and 2014/15
Rates differ for: G S D
Savings N/A 0/10% N/A
Basic 20% 20% 10%
Higher 40% 40% 32.5%
Additional 45% 45% 37.5%

Note

The savings rate in 2015/16 is zero, in 2014/15 it was 10%.

Remittance basis charge

Resident in the UK for 2015/16 2014/15
7 of preceding 9 tax years £30,000 £30,000
12 of preceding 14 tax years 60,000 50,000
17 of preceding 20 tax years 90,000 N/A

Note

The remittance basis charge (RBC) is payable by non-UK domiciled individuals who claim the remittance basis and who have been resident in the UK for the periods shown.

High Income Child Benefit charge (HICBC)

  2015/16 2014/15
Lower threshold £50,000 £50,000
Upper threshold 60,000 60,000

Notes

  1. Only applicable to families who receive child benefit, where adjusted net income of highest earner is above lower threshold.
  2. HICBC is equivalent to 1% of child benefit received by the family, for every £100 of adjusted net income over lower threshold.
  3. Highest earner in family must declare child benefit received by them or their partner on their tax return.
  4. The recipient of child benefit can elect not to receive the benefit to avoid the HICBC, which maintain their claim for NIC purposes.