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Income Tax
Income tax rates
| 2012/13 | 2011/12 | |
| Basic rate band - income up to: | £34,370 | £35,000 |
| Starting rate for savings: | *10% | *10% |
| Basic rate | 20% | 20% |
| Dividend ordinary rate | 10% | 10% |
| Higher rate - income over: | £34,370 | £35,000 |
| Higher rate | 40% | 40% |
| Dividend upper rate | 32.5% | 32.5% |
| Additional rate - income over: | £150,000 | £150,000 |
| Additional rate | 50% | 50% |
| Dividend additional rate | 42.5% | 42.5% |
*Starting rate is for savings income up to the starting rate limit of £2,710 (£2,560) within the basic rate band. The rate applies to any balance of the limit remaining after allocating taxable non-savings income.
Trusts
For interest in possession trusts on all income, and other trusts on the first £1,000 of income ("standard rate band"):
| Note | 2012/13 | 2011/12 | |
| Dividend ordinary rate | 5 | 10% | 10% |
| Savings income | 5 | 20% | 20% |
| Other income | 5 | 20% | 20% |
| Income of other trusts above £1,000 is taxed at the special trust rates: | |||
| Rate applicable to trusts | 50% | 50% | |
| Dividend trust rate | 42.5% | 42.5% | |
Personal allowance (PA)
| Note | 2012/13 | 2011/12 | |
| Under 65 | 1,4 | £8,105 | £7,475 |
| 65 to 74* | 1,2,4 | £10,500 | £9,940 |
| 75 and over* | 1,2,4 | £10,660 | £10,090 |
| Blind person's allowance | £2,100 | £1,980 |
Married couple's allowance (MCA)
| Note | 2012/13 | 2011/12 | |
| Either partner born before 6 April 1935 (relief restricted to 10%) | 1,3,4 | £7,705 | £7,295 |
Tax Shelters
| 2012/13 | 2011/12 | |
| Enterprise Investment Scheme (EIS) up to | £1,000,000 | £500,000 |
| Venture Capital Trust (VCT) up to | £200,000 | £200,000 |
| Golden Handshake max. | £30,000 | £30,000 |
| Rent a Room - exempt on gross annual rent up to | £4,250 | £4,250 |
| Construction Industry Scheme deduction rate: | ||
| Standard (registered) | 20% | 20% |
| Higher (not registered) | 30% | 30% |
Notes
1.Ages are as the end of the tax year. Ages for the MCA relate to the elder spouse or civil partner
2.The higher rates of personal allowances are reduced by £1 for each £2 of excess income over £25,400 (£24,000) until the basic allowance is reached.
3.Similar limits apply to the married couple's allowance. The reduction in allowance is subject to a minimum level of £2,960. (For couples married before 5 December 2005, only the husband's income is taken into account. For those married on or after 5 December 2005 or in a civil partnership, only the higher earner’s income is taken into account).
4.The personal allowance, including the minimum age-related allowance, is reduced by £1 for every £2 that net adjusted income exceeds £100,000.
5.Where there are several trusts created by the same settlor, the "standard rate band" is divided equally between them, subject to a minimum band of £200 for each trust.
