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Tax Tables
Any reference to legislation and tax is based on Abacus Wealth Planning Ltd's understanding of United Kingdom law and HM Revenue & Customs practice at the date of production. These may be subject to change in the future. Tax rates and reliefs may be altered. The value of tax reliefs to the investor depends on their financial circumstances. No guarantees are given regarding the effectiveness of any arrangements entered into on the basis of these comments.
Income tax rates for individuals
| 2010/11 | 2011/12 | ||
| Bands of taxable income | % | Bands of taxable income | % |
| (£1 - £2,440)* | 10 | (£1 - £2,560)* | 10 |
| £1 – £37,400 | 20 | £1 – £35,000 | 20 |
| £37,401 - £150,000 | 40 | £35,001 - £150,000 | 40 |
| Over £150,000 | 50 | Over £150,000 | 50 |
* There is a starting rate of tax of 10% which applies to savings income only. If an individual's taxable non-savings income exceeds £2,440 in 2010/11 or £2,560 in 2011/12, then the 10% starting rate for savings will not apply. Dividend income is taxed at 10% (income up to the basic rate), 32.5% (higher rate) and 42.5% (additional rate).
Income tax rates for trusts
| Interest in Possession | *Discretionary | ||
| 2010 - 2012 | % | 2010 - 2012 | % |
| Savings income | 20 | Savings income | 50 |
| Rental income | 20 | Rental income | 50 |
| Dividend income | 10 | Dividend income | <>42.5 |
* The first £1,000 of taxable trust income is charged at 20%, or 10% for dividend income. The £1,000 band is shared between all trusts created by the same settler subject to a minimum of £200 per trust.
Income tax allowances and reliefs
| Income Tax allowances and reliefs | ||
| Personal allowance | 2010/11 | 2011/12 |
| Up to 64* | £6,475 | £7,475 |
| 65 to 74** (attained in tax year) | £9,490 | £9,940 |
| 75 & over** (attained in tax year) | £9,640 | £10,090 |
| Married couple's & civil partners allowance (age 75 and over**), relief given at 10% | £6,965 | £7,265 |
| Minimum amount of married couple's allowance | £2,670 | £2,800 |
| *Income limit for personal allowance From 2010/11 allowance reduced by £1 for every £2 of “adjusted net income” above £100,000 with no personal allowance after £112,950 (2010/11) or £114,950 (2011/12) | £100,000 | £100,000 |
| **Age related reliefs reduced by £1 for every £2 of “adjusted net income” over: but never below the basic personal allowance unless “adjusted net income“above £100,000 and never below the basic married couples allowance. | £22,900 | £24,000 |
| Enterprise Investment Scheme (EIS) |
| £500,000 (30%) |
| Venture Capital Trust (VCT) at 30% | £200,000 | £200,000 |
Capital gains tax rates for individuals
| 23.06.10 - 05.04.11 | 06.04.11 - 05.04.12 | ||
| Gains | Rate % | Gains | Rate % |
| Up to £10,100 | Nil | Up to £10,600 | Nil |
| Over £10,100 | 18% & 28%* | Over £10,600 | 18% & 28%* |
* A rate of 28% is payable by individuals with capital gains in excess of their annual exemption which when added to their income exceed the income tax higher rate threshold (£37,400 for 2010/11 or £35,000 fpr 2011/12). Where the income and capital gains do not exceed the threshold, the previous (flat) rate of 18% will continue to apply and gains straddling the threshold will pay 18% on the amount of gain below the threshold and 28% above it, (gains arising before 23 June 2010 are not also added to income to determine the rate of CGT payable for any subsequent gains made after 22 June 2010). As there are now potentially two rates applying within the same tax year (2010/11) an individual may deduct any allowable losses and the annual exempt amount for that year in the way that produces the lowest possible tax charge, (i.e. against gains taxable at 28% in preference to those taxable at 18%).
Entrepreneurs' relief was introduced from 06.04.2008 and is available for qualifying business disposals from this date.
Capital gains tax rates for trusts
| 23.06.10 - 05.04.11 | 06.04.11 - 05.04.12 | ||
| Gains | Rate % | Gains | Rate % |
| Up to £5,050* | Nil | Up to £5,300* | Nil |
| Over £5,050 | 28%** | Over £5,300 | 28 |
* The annual exemption is shared between all trusts created by the same settlor, subject to a minimum per trust of £1,010 (2010/11) or £1,060 (2011/12).
** Prior to 23.06.10 trustees and personal representatives paid 18% on their gains, and from that date the rate increased to 28%. Gains arising on bare trusts are not taxable upon the trustees but instead are taxed upon the beneficiary and the new rules for individuals will apply.
Entrepreneurs' relief was introduced from 06.04.2008 and is available for qualifying business disposals from this date.
Registered pension schemes tax charges
| Lifetime allowance | Annual allowance | ||
| 2006/07 | £1.5 million | 2006/07 | £215,000 |
| 2007/08 | £1.6 million | 2007/08 | £225,000 |
| 2008/09 | £1.65 million | 2008/09 | £235,000 |
| 2009/10 | £1.75 million | 2009/10 | £245,000 |
| 2010/11 | £1.8 million | 2010/11 | £255,000 |
| 2011/12 | £1.8 million * | 2011/12 | £50,000 |
* The Government intends to reduce the lifetime allowance to £1.5 million - probably from tax year 2012/13, but possibly from 2011/12.
Notional earnings cap
National insurance rates & contributions
| Class 1 (Employment) 06.04.2011 | Weekly | Yearly |
| Lower earnings limit (LEL) | £102 | £5,304 |
| Upper earnings limit (UEL) | £817 | £42,475 |
| Upper Accruals Point (UAP) | £770 | £40,040 |
| UAP is the threshold used in the calculation of State Second Pension and contracted out rebates. It replaced the UEL from 06.04.2009 | ||
| Primary earnings threshold (employees) | £139 | £7,225 |
| Secondary earnings threshold (employers) | £136 | £7,072 |
| Low Earnings Threshold | £14,400 | |
| This is used in the calculation of the State Second Pension. Individuals who earn at least the LEL are deemed to earn the low earnings threshold for State Second Pension purposes | ||
| Employee contribution rates 06.04.11 | ||
| Contracted in (on earnings between primary threshold and UEL) | 12% | |
| Reduced rate for married women and widows | 5.85% | |
| Contracted out (on earnings between primary threshold and UAP) | 10.4% | |
| Contracted out (on earnings between UAP and UEL) | 12% | |
| If contracted out via an occupational money purchase scheme, the contracted in rate will be deducted from salary, with the difference between the contracted in and contracted out rate being rebated into the pension. | ||
| Earnings above UEL (including that for married women and widows) | 2% | |
| Employer contribution rates 06.04.11 (on earnings above secondary earnings threshold) | ||
| Contracted in | 13.8% | |
| Contracted out (final salary) | 10.1% | |
| Contracted out (money purchase) | 12.4% | |
| Additional age-related rebates of 0% - 4.4% of middle band earnings apply to contracted out money purchase schemes. Employer contributions on earnings above the upper earnings limit are assessed at the contracted in rate. | ||
| Class 2 (Self-employed) 06.04.2011 | ||
| Profits between £5,315 and £7,225 | £2.50 per week | |
| Class 3 (Voluntary) from 06.04.2011 | £12.60 per week | |
| Class 4 (Self-employed, additional levy) 06.04.2011 | ||
| Profits between £7,225 and £42,475 | 9% | |
| Profits over £42,475 | 2% | |
Inheritance tax rates
| Death rate | Lifetime rate | Chargeable transfers 2010/11 | Chargeable transfers 2011/12 |
| Nil | Nil | £0 - £325,000 | £0 - £325,000 |
| 40% | 20% | Over £325,000 | Over £325,000 |
| Rates of charge on certain gifts within seven years of death | |||
| Years between gift and death | % of death rate charge | ||
| 0 - 3 | 100 | ||
| 3 – 4 | 80 | ||
| 4 – 5 | 60 | ||
| 5 – 6 | 40 | ||
| 6 - 7 | 20 | ||
Exemptions
The following are the main exemptions which are available in certain circumstances:
Not all the above exemptions may be available at the same time.
Corporation tax rates
| Rate | Year to 31.03.2011 | Year to 31.03.2012 |
| Small companies' rate: £1 - £300,000 (This applies to the first £300,000 of profits whether retained or distributed as dividends) | 21% | 20% |
| Marginal rate: £300,001 - £1,500,000 (This is an effective rate that may only be used if the company does not receive UK dividend payments from other companies) | 29.75% | 27.5% |
| Marginal relief factor | 7/400 | 3/200 |
| Main rate: £1,500,001 and over | 28% | 26% |
Important tax dates
| Income Tax: | |
Payments on account | 31 January during the tax year, and 31 July following the end of the tax year. Normally each of these will be *half of the tax due for the previous tax year. * If you know that your income for the current year will be lower than the previous year's income, you can ask HMRC to reduce your payments on account. However, if HMRC later find that extra tax was due, you will have to pay interest on it. You may also have to pay a penalty if you have asked HMRC to reduce the payments without taking proper care. |
| Balancing Payment | 31 January following the end of the tax year. |
| Employee P11d | 6 July after the end of the tax year |
| Tax returns | 31 October after the end of the tax year for paper tax returns If the inidividual receives the tax return after 31 July, the deadline is three months following the date of issue of the notice 30 December after the end of the tax year for an online if HMRC to collect tax through tax code (where possible) if the amount of tax owed is less than £2,000. 31 January after the end of the tax year for online returns |
| Capital Gains Tax: 31 January following the end of the tax year in which the gain has arisen. | |
| Corporation Tax: Stand alone companies with taxable profit up to £1.5m - nine months after the end of the accounting period (AP). Companies with taxable profits over £1.5m# - will pay Corporation Tax in four equal quarterly instalments starting between the 6th and 7th month of the AP and based on estimated liabilities. #Excludes companies whose profits in the immediately preceding period were less than £1.5m and in the current period less than £10m. | |
| Inheritance Tax: | |
| Death | Normally 6 months after the end of the month in which death occurred. |
| Lifetime transfer | Normally 12 months after the end of the month in which the transfer is made. |
Individual Savings Accounts (ISAs) limits
| Maximum contributions 2011/12: | |
| Cash ISA | up to £ 5,340 |
| Stocks and Shares ISA | up to £10,680 |
Stamp duty land tax (property purchase)
| Residential | Non-residential | 06.04.11 |
| Value of Consideration | Value of Consideration | Rate |
| Up to £125,000 | up to £150,000 | 0% |
| £125,001 - £250,000* | £150,001 - £250,000 | 1% |
| £250,001 - £500,000 | £250,001 - £500,000 | 3% |
| £500,001 - £1,000,000 Over £1,000,000 | Over £500,000 - | 4% 5% |
* From 25.03.2010 to 24.03.2012 inclusive, first time buyers of residential property will not pay stamp duty land tax on properties up to £250,000.
A nil per cent band applies to residential property transactions in designated disadvantaged areas up to £150,000.
State Benefits 2010 - 2012
| 2010/11 per week | 2011/12 per week | |
| Retirement pension | ||
| Single person | £97.65 | £102.15 |
| Married couple/civil partners | £156.15 | £163.35 |
| State Pension Credit (Single person) | ||
| Guaranteed element | £132.60 | £137.35 |
| Savings element | up to £20.52 | up to £20.52 |
| State Pension Credit(Married couple/civil partners) | ||
| Guaranteed element | £202.40 | £209.70 |
| Savings element | up to £27.09 | up to £27.09 |
| Jobseeker's allowance (age 25 and over) | ||
| Single person | £65.45 | £65.45 |
| Incapacity benefit (only available for claims made before 27.10.2008) | ||
| Short-term (under pension age) | ||
| First 28 weeks | £68.95 | £71.10 |
| 29 to 52 weeks | £81.60 | £84.15 |
| Short-term (over pension age) | ||
| First 28 weeks | £87.75 | £90.45 |
| 29 to 52 weeks | £91.40 | £94.25 |
| Long-term (over 52 weeks) | £91.40 | £94.25 |
| Employment and support allowance (only available for new claims made after 26.10.2008) | ||
| First 13 weeks (age 25 or over) | £65.45 | £65.45 |
| Week 14 onwards (no additional component) | £65.45 | £65.45 |
| With work related activity component | £91.40 | £91.40 |
| With support component | £96.85 | £96.85 |
| Bereavement benefits | ||
| Bereavement payment* (lump sum) | £2,000 | £2,000 |
| Widowed parent's allowance | £97.65 | £100.70 |
| Bereavement allowance (standard rate) | £97.65 | £100.70 |
| Child benefit | ||
| First child | £20.30 | £20.30 |
| Each subsequent child | £13.40 | £13.40 |
