Tax Rates and Threshold

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Rates and Allowances for 2020/21

The following summaries the main tax rates and allowances for the 2020/21 year which relevant to the majority of our clients. This is not an exhaustive list and personal advice should be sought as to your exposures to UK taxation.

Income Tax

Personal Allowance GBP 12,500

The Personal Allowance applies only to citizens of European Economic Area countries who are non-resident for UK tax purposes, to individuals who are nationals and residents of certain countries, to nationals of Bulgaria, Israel and Jamaica and who meet one of a number of other unusual conditions.

Full details can be found pages RRN4 and RRN5 at the following link:
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/687255/SA109-notes-2018.pdf 

The Personal Allowance is available to those who are nationals and residents of the following Asian countries: Australia, Bangladesh, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, Papua New Guinea, Philippines, Taiwan, Thailand, Vietnam.

The Personal Allowance is not available to nationals and residents of: Cambodia, China, Hong Kong, Laos, Myanmar, Singapore

Capital Gains Tax

Annual Exemption GBP 12,300

The Annual Exemption is available to all taxpayers, regardless of nationality and location.

Corporation Tax

Tax on corporate incomes and gains applies at a flat rate of 19%, whether the company is situated in the UK or offshore.

Main Rates of Income Tax, Capital Gains Tax and Corporation Tax

Type Thresholds
Basic GBP 0 – GBP 37,500
Higher Rate GBP 37,501 – GBP 150,000
Additional Higher Rate GBP 150,001
Income Tax Capital Gains Tax
All Incomes Dividends Residential Non-Residential
20% 7.5% 18% 10%
40% 32.5% 28% 20%
45% 38.1% 28% 20%
Corporation Tax
19%
19%
19%

Different rates apply for Trustees.

Inheritance Tax

Nil Rate Band GBP 325,000
Main Residence Nil Rate Band GBP 175,000
Main Inheritance Tax Rate 40%
Lifetime Inheritance Tax Rate 20%
Inheritance Tax Rate where at least 10% of the net estate has been passed on death to a qualifying charity 36%

Stamp Duty Land Tax – England and Northern Ireland Only

Residential Property

Band
£0– £125,000
£125,001–£250,000
£250,001–£925,000
£925,001–£1,500,000
£1,500,001–
Resident of the UK
Standard Rate Accelerated rate
0% 3%
2% 5%
5% 8%
10% 13%
12% 14%
Non-Resident for Completions from 1st April 2021
Standard Rate Accelerated rate
2% 5%
4% 7%
7% 10%
12% 15%
14% 17%

Land and Buildings Transactions Tax – Scotland Only

Residential Property

Band
£0–£145,000
£145,001–£250,000
£250,001–£325,000
£325,001–£750,000
£750,001–

additional dwelling supplement

Standard Rate
0%
2%
5%
10%
12%

4%

Land Transaction Tax – Wales Only

Residential Property

Band
£0–£180,000
£180,001–£250,000
£250,001–£400,000
£400,001–£750,000
£750,001–£1,500,000
£1,500,000–
Standard Rate Accelerated Rate
0% 3%
3.5% 6.5%
5% 8%
7.5% 10.5%
10% 13%
12% 15%

Stamp Duty Land Tax, Land and Transaction Tax and Land Transaction Tax also have rates for leases and non-residential property which are not shown here.

Annual Tax on Enveloped Dwellings (ATED)

Band
£500,001–£1,000,000
£1,000,001–£2,000,000
£2,000,001–£5,000,000
£5,000,001–£10,000,000
£10,000,001–£20,000,000
£20,000,000–
Tax Due
£ 3,700
£ 7,500
£ 25,200
£ 58,850
£ 118,050
£ 236,250
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