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Capital Gains Tax
| Capital gains tax rates and bands for 2016/17 |
| On chargeable gains |
|
|
Total taxable income and gains:
up to £32,000
from £32,001 |
10%
20% |
| Annual exemption |
|
| - individual |
£11,100 |
| - most trustees |
£5,550 |
| Transfers between husband and wife or civil partners living together are generally exempt. |
| Chattels exemption |
|
| (proceeds per item or set) |
£6,000 |
Entrepreneurs' Relief
Qualifying gains will be taxed at 10%.
Claims may be made on more than one occasion up to a “lifetime” total of £10 million.
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Gift Aid
- Individuals are able to claim higher rate relief on cash gifts and payments to charities under gift aid. Basic rate tax is treated as having been deducted, so you must pay enough tax for the year to cover the tax witheld from your Gift Aid payment.
- Special tax reliefs apply to gifts to charities of certain types of shares and securities, or land and buildings.
- Individuals have the opportunity to make a claim for charitable donations made in one tax year to be treated as if they had been made in the previous tax year. For example, a request could be made for Gift Aid payments made between 6 April 2016 and the date that the 2016 return is filed to be treated as if they were made in the year to 5 April 2016. This would mean that a payment could rank for higher rate tax relief for 2015/16, even if the donor is liable at basic rate only in 2016/17. The request would normally be made by completing the relevant box in the 2016 tax return, and the opportunity to carry back donations is lost once that return has been filed (provided this is no later than 31 October 2016 or 31 January 2017, as appropriate). It is not possible to amend the 2016 tax return in order to carry back a donation.
Give As You Earn
- Employees may authorise participating employers to deduct donations from their gross salary for forwarding to their nominated charities.
- Employees receive tax relief in full on their donations.
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Corporation Tax
| Financial Year to |
31 March 2017 |
31 March 2016 |
| Corporation Tax rate |
20% |
20% |
|
Income Tax
| Income tax rates |
1 |
2016/17 |
2015/16 |
| Starting rate limit (savings income) |
2 |
*£5,000 |
*£5,000 |
| Starting rate |
2 |
*0% |
*0% |
| Basic rate band - income up to |
£32,000 |
£31,785 |
| Basic rate |
20% |
20% |
| Dividend ordinary rate, otherwise taxable at basic rate |
***7.5% |
10% (0%**) |
| Higher rate - income over |
£32,000 |
£31,785 |
| Higher rate |
40% |
40% |
| Dividend upper rate, otherwise taxable at higher rate |
***32.5% |
32.5% (25%**) |
| Additional rate - income over |
£150,000 |
£150,000 |
| Additional rate |
45% |
45% |
| Dividend additional rate, otherwise taxable at additional rate |
***38.1% |
37.5%
(30.6%**) |
|
For 2016/17 Scottish taxpayers are effectively subject to the same income tax rates as the rest of the UK.
* If an individual's taxable non-savings income exceeds the starting rate limit, then the starting rate will not be available for savings income
For 2016/17, £1,000 of savings income for basic rate taxpayers (£500 for higher rate) may be tax-free.
** Effective rate with tax credit
*** For 2016/17 the first £5,000 of dividends are tax-free |
| Personal allowance (PA) |
|
|
| Born after 5 April 1938 |
3 |
£11,000 |
£10,600 |
| Born before 6 April 1938 |
4 |
£11,000 |
£10,660 |
| Income limit for PA |
3 |
£100,000 |
£100,000 |
| Income limit for PA (Born before 6 April 1938) |
4 |
£27,700 |
£27,700 |
| Blind person's allowance |
|
£2,290 |
£2,290 |
| Married couple's allowance (MCA) |
|
|
| Either partner born before 6 April 1935 (relief restricted to 10%) |
5 |
£8,355 |
£8,355 |
| Transferable tax allowance ('Marriage Allowance') |
|
|
| For certain married couples and civil partners born after 5 April 1935 (relief 20%) |
6 |
£1,100 |
£1,060 |
| 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 |
| Social Investment Tax Relief |
£1,000,000 |
£1,000,000 |
| Golden Handshake max. |
£30,000 |
£30,000 |
Notes
- From 2016/17 onwards, all individuals will be entitled to the same personal allowance, regardless of the individual’s date of birth.
- If an individual’s taxable non-savings income exceeds the starting rate limit, then the starting rate for savings will not be available for savings income.
- The personal allowance, including the minimum age-related allowance, is reduced by £1 for every £2 that adjusted net income exceeds £100,000, regardless of the individual’s date of birth.
- Personal allowances for those born before 5 April 1938 are reduced by £1 for each £2 of excess income over £27,700 until the basic allowance is reached.
- Similar limits apply to the married couple's allowance. The reduction in allowance is subject to a minimum level of £3,220. (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).
- Available to spouses/civil partners born after 5 April 1935. The 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 at 20% of the transferred amount.
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