Income Tax Allowances Table

If you are looking at Income Tax Allowances and reviewing or planning your finances, please feel free to contact us. We can discuss your specific circumstances and look at tax efficient ways to legally minimise your income tax and optimise your tax relief.

Income Tax Allowances Table

Income Tax Allowances 2016-17 2017-18 2018-19
Personal Allowance for people born after 5 April 1948 (1) (2)(4) £11,000 £11,500 £11,850
Income limit for Personal Allowance (2) £100,000 £100,000 £100,000
Personal Allowance for people born between 6 April 1938 and 5 April 1948 (1) (2) (3) (4) £11,000 £11,500 £11,850
Personal Allowance for people born before 6 April 1938 (1) (2) (3) (4) £11,000 £11,500 £11,850
Married Couple’s Allowance (born before 6th April 1935 and aged 75 and over) (3) (4) £8,355 £8,455 £8,695
Income limit for the allowances for those born before 6 April 1948 N/A N/A N/A
Income limit for the allowances for those born before 6 April 1938 N/A N/A N/A
Minimum amount of Married Couple’s Allowance £3,220 £3,260 £3,360
Blind Person’s Allowance £2,290 £2,320 £2,390
Dividend Allowance (5) £5,000 £5,000 £2,000
Personal savings allowance for basic rate tax payers (6) £1,000 £1,000 £1,000
Personal savings allowance for higher rate tax payers (6) £500 £500 £500
Total income limit for Married couples allowance £27,700  £28,000  £28,900 
Transferable marriage allowance (7)  £1,100 £1,150  £1,185 
Trading allowance (8) N/A  £1,000  £1,000 
Property income allowance (9) N/A  £1,000  £1,000 

If you are looking at Income Tax Allowances and reviewing or planning your finances, please feel free to contact us. We can discuss your specific circumstances and look at tax efficient ways to legally minimise your income tax and optimise your tax relief.

1. From 6th April 2016 onwards, all individuals are entitled to the same personal allowance, regardless of date of birth. This is set by the UK Government and is therefore the same for all UK taxpayers.

2. The Personal Allowance reduces where the income is above £100,000 – by £1 for every £2 of income above the £100,000 limit. This reduction applies irrespective of age.

3. These allowances reduce where the income is above the income limit by £1 for every £2 of income above the limit.

4. The Personal Allowance for Scottish resident taxpayers is £11,500 from 6 April 2017 until 5th April 2018. The Personal Allowance for Scottish resident taxpayers is expected to be £11,850 from 6th April 2018, subject to approval of the draft 2018-19 Scottish Budget by the Scottish Parliament.

5. Tax relief for the Married Couple’s Allowance is given at the rate of 10 per cent.

6. From 6th April 2016, the new Dividend Allowance results in individuals not paying tax on the first £5,000 of dividend income they receive. From 6th April 2018 the Dividend Allowance will reduce to £2,000.

7. From 6th April 2016, the new Personal Savings Allowance results in basic rate tax payers not paying tax on the first £1,000 of savings income they receive. Higher rate tax payers do not pay tax on the first £500 of savings income.

8. Introduced from 6 April 2015, 10% of the unused element of a personal allowance can be transferred between spouses, as long as the higher earning spouse does not pay income tax at above basic rate. For Scottish tax payers the allowance is still based on the UK basic and higher rate thresholds.

9. The allowance was introduced from 6 April 2017. Where an individual’s trading income is less than this allowance, full relief will be given so that the income is not charged to tax, unless the individual elects otherwise. If the individual’s trading income is more than this allowance, the individual may elect to deduct this allowance from the trading income instead of the usual method of deducting the actual expenses incurred. This allowance does not apply to partnership trading income.

10. The allowance was introduced from 6 April 2017. Where an individual’s property income is less than this allowance, full relief will be given so that the income is not charged to tax, unless the individual elects otherwise. If the individual’s property income is more than this allowance, the individual may elect to deduct this allowance from the property income instead of the usual method of deducting the actual expenses incurred. This allowance does not apply to partnership property income nor income to which rent a room relief is given.

Please contact us for further information.

Disclaimer:

The information should be used as a guide only and your specific circumstances are best discussed directly with us.

No reliance should be placed on this material and no action should be taken without seeking the appropriate professional or legal advice. Although the authors make reasonable efforts to ensure the content is accurate and up-to-date, the authors make no representations, warranties or guarantees that the content is accurate, complete or up-to-date and accept no responsibility whatsoever for any loss occasioned by anyone acting on this information.