Income Tax Rates

Allowances

Allowances2018/192017/18
Personal Allowance (PA)*£11,850£11,500
Marriage Allowance †1,1901,150
Blind Person’s Allowance2,3902,320
Rent a room relief **7,5007,500
Trading Income **1,0001,000
Property Income **1,0001,000

* PA will be withdrawn at £1 for every £2 by which ‘adjusted income’ exceeds £100,000. There will therefore be no allowance given if adjusted income is £123,000 or more (2017/18: £123,000).

† The part of the PA that is transferable to a spouse or civil partner who is not a higher or top rate taxpayer.

** If gross income exceeds it, the limit may be deducted instead of actual expenses.

Rate bands2018/192017/18
Basic Rate Band (BRB)£34,500£33,500
Higher Rate Band (HRB)34,501-150,00033,501-150,000
Additional rateover 150,000over 150,000
Personal Savings Allowance (PSA)
– Basic rate taxpayer1,0001,000
– Higher rate taxpayer500500
Dividend Allowance (DA)2,0005,000

BRB (Scotland: intermediate rate band) and additional rate threshold are increased by personal pension contributions (up to permitted limit) and Gift Aid donations.

Tax rates2018/19 & 2017/18
Rates differ for General, Savings and Dividend incomeGSD
Basic rate20%20%7.5%
Higher rate40%40%32.5%
Additional rate45%45%38.1%

General income (salary, pensions, business profits, rent) usually uses personal allowance, basic rate and higher rate bands before savings income (interest). Scottish taxpayers are taxed at different rates on general income (see below).

To the extent that savings income falls in the first £5,000 of the basic rate band, it is taxed at nil rather than 20%.

The PSA taxes interest at nil, where it would otherwise be taxable at 20% or 40%.

Dividends are normally taxed as the ‘top slice’ of income. The DA taxes the first £2,000 (2017/18: £5,000) of dividend income at nil, rather than the rate that would otherwise apply.

Income tax – Scotland 2018/19BandRate
Starter rate£2,00019%
Basic rate2,001 – 12,15020%
Intermediate rate12,151 – 31,58021%
Higher rate31,581 – 150,00041%
Top rateover 150,00046%

High Income Child Benefit Charge (HICBC)

1% of child benefit for each £100 of adjusted net income between £50,000 and £60,000.

Remittance basis charge2018/192017/18
For non-UK domiciled individuals who have been UK resident in at least:
7 of the preceding 9 tax years£30,000£30,000
12 of the preceding 14 tax years60,00060,000
15 of the preceding 20 tax yearsDeemed to be UK domiciled
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