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How tax rates vary depending on where you live

3 minute read

Some tax rates are different for different parts of the UK. We explain what you need to know.

Who's it for? All investors 

The value of investments can fall as well as rise and you could get back less than you invest. If you’re not sure about investing, seek independent advice. Tax rules can change in future. Their effects on you will depend on your individual circumstances.

What you’ll learn:

  • What Scottish income tax rates are.
  • When income tax rates in Wales will start to differ from rates paid in England.
  • How much tax you’ll pay property transactions in Wales and Scotland.

Certain tax rates can vary across the different countries of the United Kingdom, so it’s important to familiarise yourself with the rates which apply to you.

This can help you work out how much tax you may have to pay and make the most of any allowances which may be available to you.

Here, we explain the different rates which apply depending on where you live.

Scotland

Income tax

If you live in Scotland, you’ll pay Scottish income tax on your wages, pension and most other taxable income, such as profits you make if you’re self-employed and rental income.

Band

Taxable income (2019-20)

Scottish tax rate

Personal Allowance

Up to £12,5001

0%

Starter Rate

Over £12,500 to £14,549

19%

Scottish Basic Rate

Over £14,549 to £24,944

20%

Intermediate Rate

Over £24,944 to £43,430

21%

Higher Rate

Over £43,430 to £150,000

41%

Top Rate

Above £150,001

46%

Scotland pays the same rate as the rest of the UK on dividend income and savings interest.

Savings income and dividend tax rates

The tax-free dividend allowance is currently £2,000 (2019-20). Dividends received in excess of this are tax in accordance with the following Taxable Income rates

Tax rate for dividends above £2,000

Income rates

Tax rate

Ordinary rate

£0 - £37,500

7.50%

Upper rate

£37,501 - £150,000

32.50%

Additional rate

£150,000+

38.10%

Personal Savings Allowance

Basic rate taxpayers will not have to pay tax on the first £1,000 of their savings income.

Higher rate taxpayers will not have to pay tax on the first £500 of their savings income.

There is no personal savings allowance for additional rate taxpayers.

Stamp duty

If you’re buying a property in Scotland, you'll pay Land and Buildings Transaction Tax (LBTT) rather than stamp duty. LBTT rates for 2019/20 are shown below.

Property Value

LBTT rate

Up to £145,000

Zero

The next £105,000 (the portion from £145,001 to £250,000)

2%

The next £75,000 (the portion from £250,001 to £325,000)

5%

The next £425,000 (the portion from £325,001 to £750,000)

10%

The remaining amount (the portion above £750,000)

12%

Wales

Income tax

From 6 April 2019 rates of income tax in Wales will be set by the Welsh Government. The basic, higher and additional rates of income tax will be reduced by Central Government by 10p. The Welsh rates, set by the Welsh Government, will then be added to this.

The Welsh Government has set the first Welsh rates of income tax at 10p, so the rates of income tax paid by Welsh taxpayers will continue to be the same as those paid by English and Northern Irish taxpayers.

Learn more about the key tax rates, limits and allowances in England and Northern Ireland

Stamp duty

If you’re buying a property in Wales, you’ll pay the Welsh government’s Land Transaction Tax (LTT), rather than stamp duty. there is no LTT to pay for all buyers purchasing homes costing up to £180,000.

The following table shows the main residential LTT rates and bands in Wales.

Property Value

LBTT rate

Up to £180,000

Zero

The next £70,000 (the portion from £180,000 to £250,000)

3.5%

The next £150,000 (the portion from £250,001 to £400,000)

5%

The next £350,000 (the portion from £400,001 to £750,000)

7.5%

The next £750,000 (the portion from £750,001 to £1.5m)

10%

The remaining amount (the portion above £1.5m)

12%

Northern Ireland

Tax rates in Northern Ireland are currently the same as in England.

Plans to devolve corporation tax have been postponed indefinitely due to the collapse of power-sharing in Belfast.2

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