8
Spring Budget 2017
Income tax and personal savings Income tax
2017/18
2016/17
Basic rate band – income up to
† £33,500
£32,000
Starting rate for savings income
*0%
*0%
Basic rate
20%
20%
Dividend ordinary rate
**7.5%
**7.5%
Higher rate – income over
† £33,500
£32,000
Higher rate
40%
40%
Dividend upper rate
**32.5%
**32.5%
Additional rate – income over
£150,000
£150,000
Additional rate
45%
45%
Dividend additional rate
**38.1%
**38.1%
Starting rate limit (savings income)
*£5,000
*£5,000
† For Scottish taxpayers only the limit is £31,500. *If an individual’s taxable non-savings income exceeds starting rate limit, then starting rate limit for savings will not be available for savings income. £1,000 of savings income for basic rate taxpayers (£500 higher rate) may be tax-free. **The first £5,000 of dividends are tax-free.
Personal allowances
2017/18
2016/17
£11,500
£11,000
Personal Allowance (PA)
Married couple’s allowance (MCA) (relief given at 10%) Either partner born before 6 April 1935 Transferable Tax Allowance ('Marriage Allowance') For certain married couples (relief given at 20%)
*£8,445
*£8,355
£1,150
£1,100
*Allowances are reduced by £1 for every £2 that adjusted net income exceeds £28,000 (£27,700) to a minimum MCA of £3,260 (£3,220). Where adjusted net income exceeds £100,000, PA is reduced in the same way until it is nil regardless of the individual’s date of birth.
Dividend allowance reduction
The tax-free dividend allowance will be reduced from £5,000 to £2,000 from 6 April 2018.
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