All of the rates below are shown for the current tax year 2023/24.
The details on this page are based on our understanding of tax rates, allowances and HM Revenue & Custom’s practices as at March 2023. The levels and value of tax benefits depend on your individual circumstances and are subject to change. The Financial Conduct Authority does not regulate tax advice.
- Basic rate – 20%
- Higher rate – 40%
- Additional rate – 45%
- Taxable income above which Higher rate applies – £37,700
- Taxable income above which Additional rate applies – £125,140
- Dividend Ordinary rate – 8.75%
- Dividend Higher rate – 33.75%
- Dividend Additional rate – 39.35%
- Dividend Allowance – £1,000
- Personal Savings Allowance – £1,000
- Total income limit to qualify for 0% savings interest tax rate – £16,500
*The dividend rates apply to the extent that dividend income exceeds the £1,000 dividend allowance; personal savings allowance is reduced to £500 for higher rate tax payers and nil for additional rate taxpayers.
- Personal allowance – £12,570
- Income limit for personal allowance – £100,000
The personal allowance is reduced by £1 for every £2 of income above the income limit, so that those earning more than £123,000 receive no personal allowance at all.
- Registered blind person’s allowance – £2,870
Married couple’s allowances:
- For those born before 6 April 1935 – £10,375*
- Transferable personal allowance if born after 5 April 1935 – £1,260**
*Tax relief on this amount is restricted to 10%
**Subject to the recipient not being liable to tax above basic rate.
- Standard rate – 10%
- For higher & additional rate taxpayers – 20%
- Rate for entrepreneurs relief – 10%
- Individual allowance – £6,000
- Allowance for most Trustees – £3,000
- Lifetime allowance for entrepreneurs’ relief – £1m
- Nil Rate Band – £325,000
- Standard rate – 40%
- Rate after reduction for charitable donations – 36%
At least 10% of the total estate must be given to charity by the estate to qualify for the reduction
- Residence Nil Rate Band – £175,000
Applicable when giving your home away to your children or grandchildren.
This reduces if the net value of the estate is over £2m, by £1 for every £2 that the estate exceeds this value.
If you’re married and your estate is worth less than the £2m threshold, any unused allowance can be added to your partner’s allowance when you die. This means their threshold can be as much as £1m.
However, if the net value of your estate exceeds £2m, the additional nil rate band will be reduced by £1 for every £2 by which the net value exceeds that amount.
- Gifts to spouse (domiciled in the UK) – Unlimited
- Annual exemption – £3,000
- Small gifts – Unlimited up to £250
- Gifts in consideration of marriage, made to:
- A child – £5,000
- A grandchild or great-grandchild – £2,500
- Any other person – £1,000
- Gifts to charity – Unlimited
Regular gifts from excess income may also be exempt from inheritance tax, subject to proof there is enough income available after the gift to maintain the giver’s normal lifestyle. Such gifts include:
Christmas, birthday, wedding, civil partnership and anniversary presents.
Life assurance policy premiums
Regular payments into savings plans
Lifetime transfers and potentially exempt transfers: Taper relief may be available to reduce the tax payable on non-exempt lifetime gifts made between 3- 7 years prior to death of the donor.
- Standard earnings rate when earning over £190 per week (Class 1, employed) – 13.25%
- Upper earnings rate when earning over £967 per week (Class 1, employed) – 3.25%
- Self employed (Class 2 & 4):
- Flat rate when earnings are above £6,725 p.a. – £3.15 per week
- On profits between £9,880 & £50,270 p.a. – 10.25%
- On profits above £50,000 – 3.25%
- Voluntary (Class 3) £15.85 – per week
Paid by those wishing to fill gaps in their contribution record, e.g. to top up their state pension
- Individual Savings Account (ISA) – £20,000
- Junior ISA – £9,000
- Lifetime ISA – £4,000
- Pension Annual Allowance -£60,000
- Money Purchase Annual Allowance – £10,000
The normal annual allowance is tapered by £1 for each £2 that an individual’s ‘adjusted income’ exceeds £260k. This is subject to a minimum annual allowance of £10,000 for individual’s with ‘adjusted income of £240k or more. (Adjusted income can be defined as total income before tax from all sources including employer pension contributions)
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© 2023 A&J WEALTH MANAGEMENT LTD A&J Wealth Management Ltd is authorised and regulated by the Financial Conduct Authority. Financial Services Register, no 428590, at www.fca.org.uk/register Registered in England, Company no: 5105933. Registered Head Office: Sawfords, Bigfrith Lane, Cookham Dean, Maidenhead, Berkshire SL6 9PH