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Posted on: 01 Feb, 16

Year-end Tax Guide 2015/16

Personal Tax and Allowances

Allowances and rates affecting income, savings, investments and pensions

Personal Allowances

Basics

Generally the personal allowance is £10,600 with entitlement to a maximum of £10,660 for those born before 6 April 1938. Conditions and restrictions apply to the entitlement over £10,600. Non-savings and savings income above the personal allowance is taxed at rates from 20% to 45%.

Some taxpayers with very modest savings and income may only pay 10%. The basic rate of tax increases to the higher rate for taxable income over £31,785 and to 45% when taxable income exceeds £150,000.

A higher marginal tax rate may be payable between £100,000 and £121,200 when the personal allowance is gradually withdrawn giving an effective marginal rate of 60% in this band for non-savings and savings income. In some cases, you can transfer £1,060 of your personal allowance to your spouse or civil partner.

Planning

  • Is everyone in your family taking full advantage of their personal allowance?
  • Are there opportunities to utilise any unused allowances this tax year?
  • What can you do to take advantage of marginal tax rates and reduce the slice taxable at a higher rate?

Download the PDF to see the full document.

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