RATES OF INCOME TAX 2016/17

Transcription

1 TAX FACTS 2017/2018

2 RATES OF INCOME TAX 2016/17 Band Starting * Basic Higher Add l Taxable Income Up to 5,000 Up to 32,000 32,001 to 150,000 Over 150,000 Earned Savings ** Dividend *** 20% 0% 7.5% 20% 20% 7.5% 40% 40% 32.5% 45% 45% 38.1% 2017/18 Band Starting * Basic Higher **** Add l Taxable Income Up to 5,000 Up to 33,500 33,501 to 150,000 Over 150,000 Earned Savings ** Dividend *** 20% 0% 7.5% 20% 20% 7.5% 40% 40% 32.5% 45% 45% 38.1% * If an individual s non-savings income exceeds 5,000 then the starting rate for savings income will not be available. ** In general, to determine the rate of tax the gross savings income is added to other taxable income. *** In general, to determine the rate of tax the dividend income is treated as the top-slice of income. **** For Scottish taxpayers the higher rate threshold is set at 31,500 for 2017/18. TRUST INCOME Trust income under 1,000 Tax rate Dividend-type income 7.5% All other income 20% Trust income over 1,000 Dividend-type income 38.1% All other income 45%

3 INCOME TAX ALLOWANCES 2016/ /18 Personal 11,000 11,500 Dividend Allowance 5,000 5,000 Personal Savings Allowance Basic Taxpayer 1,000 1,000 Higher Taxpayer Where an individual s adjusted net income is above the income limit of 100,000 p.a., the amount of the personal allowance will be reduced by 1 for every 2 of income above the limit until it is eliminated. Married Couple s Allowance (MCA) is only available for married couples where at least one of the parties was born before 6 April However, where a person born before 6 April 1935 gets married they or their spouse will be able to claim MCA. Married Couple s Allowance* 2016/ /18 8,355 8,445 Blind person s allowance 2,290 2,320 Income limit for agerelated allowances 27,700 28,000 The age-related allowances are reduced by 1 for every 2 of the individual s income above the income limit subject to the minimum personal allowances of those aged up to 65. For those still entitled to the age-related married couple s allowance, the minimum amount will be 3,260. * Relief is restricted to 10%. INDIVIDUAL SAVINGS ACCOUNT Up to 20,000 can be contributed to an ISA for 2017/18 CAPITAL GAINS TAX Net gains in excess of the annual exemption of 11,300 are taxable at 10% for 2017/18 for individuals whose total income and capital gains fall within the basic rate limit for income tax purposes. A rate of 20% applies to gains (or part of gains thereof) for individuals above the basic rate limit.

4 Where the asset being disposed of is a property other than the principal private residence, an additional 8 percentage points will be added to the rates of tax quoted. of Tax INHERITANCE TAX Nil 40%* * For deaths on or after 6 April 2012, a lower rate of 36% applies where 10% or more of the deceased s net estate is left to charity. Main Exemptions Gifts to spouse domiciled in UK Taxable Estate on death On first 325,000 Over 325,000 unlimited Annual exemption 3,000 Small gifts 250 Gifts in consideration of marriage By parent 5,000 By grandparent or fiancé 2,500 By any other person 1,000 Gifts to charity unlimited Normal expenditure out of income exemption may also be available. RESIDENCE NIL RATE BAND Applicable where primary residence is left to a direct descendant. Allowance per individual. Transferable between spouses. Tapered on estate over 2,000, /18-100,000. LIFETIME GIFTS Taper relief may be available to reduce the tax payable for nonexempt lifetime gifts made between three and seven years before the death of the donor. Where tax is payable on chargeable lifetime gifts, tax is initially charged at 20%. LIFE ASSURANCE PREMIUM RELIEF LAPR was abolished with effect from 6 April 2015 For Financial Year 2018 CORPORATION TAX All profits 19%

5 VALUE ADDED TAX Standard rate 20% Registration level 85,000 per annum from 1 April 2017 CAR BENEFIT ASSESSMENT Cars (both petrol and diesel) with approved emission figures are liable to tax based on their CO 2 emission rating. For petrol cars a figure of 18% of list price applies for cars with an emission rating of 95g/km, rising by 1% for each 5g of emission subject to a maximum of 37%. There is a 3% supplement for cars tht run solely on diesel, which also capped 37%. Electric cars are taxed at 9% of list price. Cars with no approved emission figures will be taxed according to their engine size. CAR FUEL ASSESSMENT The car fuel charge scale is based on a set figure of 22,600. This is multiplied by the same percentage as that used to calculate the car benefit (see above). STAMP DUTY LAND TAX (SDLT) RESIDENTIAL RATES Property or lease premium or transfer value Up to 125,000 The next 125,000 (the portion from 125,001 to 250,000) The next 675,000 (the portion from 250,001 to 925,000) The next 575,000 (the portion from 925,001 to 1.5 million) The remaining amount (the portion above 1.5 million) SDLT rate Zero 2% 5% 10% 12% COMMERCIAL RATES Property or lease premium or transfer value Up to 150,000 The next 100,000 (the portion from 150,001 to 250,000) The remaining amount (the portion above 250,000) SDLT rate Zero 2% 5%

6 NATIONAL INSURANCE CONTRIBUTIONS Class 1 - Employed Earners On weekly Earnings Employee* Employer % % Up to to to Over Class 1A Employer pays 13.8% on taxable benefits in kind (excluding some childcare benefits). Class 2/4 Self Employed Flat rate of 2.85 pw if earnings from 6th April 2017 are greater than 6,025 pa. Plus 9.0% of profits between 8,164 and 45,000 pa and 2% above 45,000 pa. Class 3 Voluntary Flat rate of per week. *Reduced rate for certain widows and married women: 5.85% of earnings between 157 pw and 866 pw plus 2% of earnings above 866 pw.

7 PERSONAL RETIREMENT PROVISION Tax relief is available in respect of personal contributions made to a registered pension scheme provided the individual is a relevant UK individual for the tax year in question. The maximum amount of contribution that qualifies for tax relief in any tax year is the greater of: The basic amount currently set at 3,600, and 100% of the individual s relevant UK earnings chargeable to income tax The limits are cumulative across all pension schemes rather than relating to one individual scheme. In addition to the personal contribution limit each individual also has an annual allowance limit encompassing all pension contributions made in the tax year on behalf of the individual. The annual allowance for 2017/18 is set at 40,000, although it may be possible to carry forward the allowance for the previous three tax years. High Earners may be subject to a reduced tapered annual allowance, and those who have flexibly accessed their pension rights subject to a 4,000 money purchase annual allowance. Once contributions paid exceed the annual allowance then the individual becomes subject to an annual allowance tax charge on the excess. There is a lifetime allowance limit for pensions savings of currently 1million across all pension arrangements. PENSION PROTECTION Lifetime Protection Lifetime allowance Primary Client specific Enhanced No liability Fixed protection million Individual protection m million Fixed protection million Individual protection m million Fixed protection million

8 Whilst every effort has been made to ensure the accuracy and completeness of the information, no representation or warranty, express or implied, is given in respect of the accuracy or completeness of the information. The information is based on Mattioli Woods plc s understanding at the time of writing of current law and HM Revenue & Customs practice and interpretation of the proposals in the Budget on 8 March 2017, which may change. It does not constitute legal or tax advice and must not be treated as such. Mattioli Woods plc can take no responsibility for any loss which may occur as a result of reliance on this information. Mattioli Woods plc is authorised and regulated by the Financial Conduct Authority. Registered in England No: Registered address: MW House, 1 Penman Way, Grove Park, Enderby LE19 1SY