INCOME TAX ALLOWANCES

2014/2015
£

2015/2016
£

Personal allowance for people born after 5 April 1948

10,000

10,600

Income limit for Personal Allowance (1)

100,000

100,000

Personal Allowance for people born between 6 April 1938 and 5 April 1948

10,500

10,600

Personal Allowance for people born before 6 April 1938

10,660

10,660

Income limit for personal allowances (born before 6 April 1948) (2)

27,000

27,000

Married couple’s allowance (3)

Maximum amount of Married Couple’s Allowance (people born before 6 April 1935) (4)

8,165

8,355

Minimum amount of Married Couple’s Allowance (5)

3,140

3,220

Transferable tax allowance for married couples and civil partners (6)

N/A

1,060

Blind Person’s Allowance

2,230

2,290

INCOME TAX RATES AND TAXABLE BANDS

2014/2015
£

2015/2016
£

Starting rate for savings: 0%*

N/A

0–5,000

Starting rate for savings: 10%*

0–2,880

N/A

Basic rate: 20%

0–31,865

0–31,785

Higher rate: 40%

31,866–150,000

31,786–150,000

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 10% ordinary rate and the 32.5% dividend upper rate.
In addition to these rates, there is a dividend additional rate of 37.5% (2012–13: 42.5%).

INHERITANCE TAX THRESHOLDS

2014/2015

2015/2016

Nil rate band

£325,000

£325,000

(1) The personal allowance reduces where the individual’s income is above this limit by £1 for every £2 above the limit. This applies regardless of the individual’s date of birth.
(2) This allowance reduces where the individual’s income is above the income limit by £1 for every £2 above the income limit until it reaches the level of the personal allowance for someone born after 5 April 1948.
(3) Available to people born before 6 April 1935. Tax relief for this allowance is restricted to 10%.
(4) This allowance reduces where the individual’s income is above the income limit. This is at a rate of £1 for every £2 above the income limit until it reaches the minimum amount. Any reduction in the married couple’s allowance applies after any reduction to the individual’s personal allowance.
(5) This is also the maximum relief for maintenance payments where at least one of the parties is born before 6 April 1935.
(6) Available to spouses/civil partners born after 5 April 1935. This allowance is 10% of the personal allowance for those born after 5 April 1938. It allows a spouse or civil partner who is not liable to income tax above the basic rate to transfer this amount of their personal allowance to their spouse/civil partner. The recipient must not be liable to tax above the basic rate. The recipient is eligible to a tax reduction of 20% of the transferred amount.