INCOME TAX ALLOWANCES

2017/2018
£

2018/2019
£

Personal allowance (1)

11,500

11,850

Income limit for personal allowance (1)

100,000

100,000

Income limit for married couples allowance (2)

28,000

28,900

Married couple’s allowance (2):

Maximum amount of married couple’s allowance (people born before 6 April 1935)

8,455

8,695

Minimum amount of married couple’s allowance

3,260

3,360

Marriage allowance (3)

1,150

1,190

Blind person’s allowance

2,320

2,390

Dividend allowance (4)

5,000

2,000

Personal savings allowance (5):

Basic rate taxpayers

1,000

1,000

Higher rate taxpayers

500

500

Property allowance (6)

1,000

1,000

Trading allowance (6)

1,000

1,000

INCOME TAX RATES AND TAXABLE BANDS

2017/2018
£

2018/2019
£

Starting rate for savings: 0%*

0–5,000

0–5,000

Basic rate: 20%

0–33,500

0–34,500

Higher rate: 40%

33,501–150,000

34,501–150,000

Additional rate: 45%

Over 150,000

Over 150,000

*From 2008/09 there is a starting rate for savings income only. If non-savings income is above this limit then the starting rate for savings will not apply.

The dividend rate is the 7.5% ordinary rate (2017–18: 7.5%) and the 32.5% dividend upper rate (2017–18: 32.5%). In addition to these rates, there is a dividend additional rate of 38.1% (2017–18: 38.1%).

INHERITANCE TAX THRESHOLDS

2017/2018

2018/2019

Nil rate band

£325,000

£325,000

Residence nil rate band

£100,000

£125,000

*Scotland diverges from the remainder of the UK in some respects.
(1) From 2016–17 onwards, all individuals are entitled to the same personal allowance, regardless of the individuals’ date of birth. This allowance is subject to the £100,000 income limit which applies regardless of the individual’s date of birth. The individual’s personal allowance is reduced where their income is above this limit. The allowance is reduced by £1 for every £2 above the limit.
(2) This age-related allowance is reduced by £1 for every £2 of income over the limit until it reaches its minimum level.
(3) This transferable allowance is available to married couples and civil partners who are not in receipt of married couple’s allowance. A spouse or civil partner who is not liable to income tax; or not liable at the higher or additional rate, can transfer this amount of their personal allowance to their spouse or civil partner. The recipient must not be liable to income tax at the higher or additional rates.
(4) The Dividend Allowance means that individuals will not have to pay tax on the first £2,000 (2017–18: £5,000) of dividend income they receive.
(5) The Personal Savings Allowance means that basic rate taxpayers will not have to pay tax on the first £1,000 (2017–18 £1,000) of savings income they receive and higher rate taxpayers will not have tax to pay on their first £500 (2017–18 £500) of savings income.
(6) From 6 April 2017, the first £1,000 of trading income is not subject to income tax. The trading allowance also applies to certain miscellaneous income from providing assets or services. From the same date a £1,000 allowance is also available for property income.