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Key tax rates, limits and allowances: Your at-a-glance guide

Here’s our run-down of all the key tax rates, limits and allowances you need to know for the 2018-19 tax year. When it comes to using ISA and pension allowances, remember you don't have to make your investment choices straight away - as long as you have the cash in place this tax year, that’s enough to secure the tax benefits of this year’s allowances.

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.

Tax rates, allowances and bands often change when one tax year finishes and a new one begins.

Knowing what they are can help you work out how much tax you’ll pay each year and ensure that you make the most of all exemptions and reliefs available to you.

Rates and allowances for the current tax year, which runs from 6 April 2018 to 5 April 2019, and for reference the 2017/18 too, are shown here.

Remember, tax rules can change in future and their effects on you will depend on your individual circumstances.

Personal Allowances

The tax-free Personal Allowance is the amount of income you can earn before you have to start paying tax. All individuals are now entitled to the same personal allowance, regardless of their date of birth.

Allowance

2017-18

2018-19

Personal allowance

£11,500

£11,850

The personal allowance is restricted by £1 for every £2 of an individual's adjusted net income above £100,000.

Allowance

2017-18

2018-19

Blind person’s allowance

£2,320

£2,390

Transferable personal allowance

£1,150

£1,185

A spouse or civil partner who isn’t liable to income tax above the basic rate may transfer £1,185 in the 2018-19 tax year (£1,150 in 2017-18) of their unused personal allowance to their spouse or civil partner, as long as the recipient isn’t liable to income tax above the basic rate.

Married couple’s allowance where one spouse or civil partner was born before 6 April 1935:

Allowance

2017-18

2018-19

Maximum amount of married couple’s allowance

£8,445

£8,695

Minimum amount of married couple’s allowance

£3,260

£3,360

This allowance is subject to a £28,900 income limit in the 2018-19 tax year (£28,000 in 2017-18). The individual’s married couple’s allowance is reduced by £1 for every £2 above this limit.

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.

These allowances remain unchanged for the 2018-19 tax year.

Income Tax rates

2017-18

2018-19

Tax rate

Taxable income above your Personal Allowance

Taxable income above your Personal Allowance

Nil rate Personal Allowance

Up to £11,500

Up to £11,850

Basic rate 20%

£11,501 to £45,000 (£11,501 to £43,000 in Scotland)

£11,851 to £46,350 (£11,501 to £43,000 in Scotland)

Higher rate 40%

£45,001 to £150,000 (£43,001 to £150,000 in Scotland)

£46,351 to £150,000 (£43,001 to £150,000 in Scotland)

Additional rate 45%

Over £150,000

Over £150,000

Savings income and dividend tax rates

The tax-free dividend allowance is currently £2,000 (£5,000 in 2017-18).

Tax rate for dividends above £2,000

2017-18

2018-19

Basic Rate and non taxpayers

7.50%

7.50%

Higher rate taxpayers

32.50%

32.50%

Additional rate taxpayers

38.10%

38.10%

Tax-free savings account allowances

Account

2017-18

2018-19

Individual savings account (ISA) allowance

£20,000

£20,000

Junior ISA subscription limit

£4,128

£4,260

Child trust fund

£4,128

£4,260

You can use your full £20,000 allowance in an investment ISA, or split however you want across a cash ISA, investment ISA, lifetime ISA (max £4,000), and an innovative finance ISA.

Find out more about our Investment ISA

Pensions

Allowance

2017-18

2018-19

Annual Allowance

Most people are able to pay £40,000 or the total value of your annual earnings, whichever is lower into pensions. Check that you’re not affected by the exceptions below.

No change

The annual allowance restricts the amount of pension contributions you can make each year while still receiving tax relief. Provided you meet certain conditions, you can carry forward any unused allowance from the previous three tax years, as long as it doesn’t exceed your earnings in the current tax year.

Exceptions:

  1. If your adjusted earnings are greater than £150,000, you lose £1 of tax relief for every £2 you earn over £150,000, up to a maximum of £30,000. This means if you earn £210,000 or more, your annual allowance will drop to £10,000. Adjusted income includes both personal and employer pension contributions. This tapered reduction doesn’t apply to anyone with ‘threshold income’ of no more than £110,000. Threshold income excludes pension contributions. Your annual allowance will therefore only be reduced if both your ‘threshold income’ is above £110,000 and your ‘adjusted income’ is over £150,000.

    So, for example, if you earn more than £110,000 and you contribute the full allowance of £40,000, you might be affected, as your adjusted income will be over £150,000, and your threshold income is over £110,000.

  2. From the point that you draw pension benefits that are eligible to be taxed, you lose your annual allowance and it’s replaced by the Money Purchase Annual Allowance (MPAA) of £4,000. You’re also no longer able to carry forward any unused annual allowance from previous tax years.

Allowance

2017-18

2018-19

Lifetime allowance

£1 million

£1,030,000

The lifetime allowance relates to the maximum amount of pension savings you can build up over your lifetime without incurring a supplemental tax . The lifetime allowance is measured on each occasion that you start drawing benefits from any of your pensions. If the total value of all your pension savings exceeds this allowance, then additional tax applies.

National Insurance Contributions – lower earnings limit (below which they aren't paid)

2017-18

2018-19

£113 per week

£116 per week

The self-employed are required to start paying NICs once annual profits reach £6,205 (£6,025 in 2017-18).

Inheritance tax

Allowance

2017-18

2018-19

Personal allowance

Up to £325,000 + £100,000 residence allowance

Up to £325,000 + £125,000 residence allowance

Couple’s allowance

Up to £650,000 + £200,000 residence allowance

Up to £650,000 + £250,000 residence allowance

Inheritance tax is payable at a rate of 40% above these thresholds. In the 2018-19 tax year, everyone is entitled to an additional £125,000 tax-free allowance which can be used against the value of their home. This will increase annually to reach £175,000 by 2020-21. This allowance may only be used when you leave your home to your children or grandchildren. This allowance will be reduced for estates with a net value exceeding £2m, by £1 for every £2 that the estate exceeds this amount.

Capital gains tax allowance

Allowance

2017-18

2018-19

Individuals

£11,300

£11,700

If you invest outside an ISA, any profits made above the annual CGT allowance are subject to tax at 10% or 20% depending on your tax band. Since April 2016, there is an additional 8% surcharge to be paid on residential property and carried interest (the share of profits or gains that is paid to asset managers).

CGT on residential property does not apply to your main home, only to additional properties (such as a flat you let out).

Remember, tax rules can change in future and their effects on you will depend on your individual circumstances.

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