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2021/22 Tax Tables

We bring you the all the tax rates and allowances for the new tax year that could impact on your personal finances.

Read our Ultimate Guide to the New Tax Year

Personal tax allowances and reliefs

The figures in brackets are the difference in £s from the previous tax year 2020/21

1. Personal allowance: £12,570 (+£70)

2. Income limit for personal allowance: £100,000 (£0)

3. Income limit for couple’s allowance: £30,400 (+£200)

Where  income is above £100,000 the Personal Allowance reduces by £1 for every £2 of income above the £100,000 limit. This reduction applies irrespective of date of birth. The Income limit for married couple’s allowance is an age-related allowance. It is reduced by £1 for every £2 of income over this limit.

Marriage, savings and other tax allowances

The figures in brackets are the difference in £s from the previous tax year 2020/21

MARRIAGE ALLOWANCE

  • Marriage allowance: £1,260 (+£10)
  • Married couple’s allowance for those born before 6 April 1935
    • Maximum amount of married couple’s allowance: £9,125 (+£50)
    • Minimum amount of married couple’s allowance £3,530 (+£20)

This transferable allowance is available to married couples and civil partners who are not in receipt of married couple’s allowance. A spouse or civil partner who is not liable to income tax, or not liable at the higher or additional rates, can transfer this amount of their unused personal allowance to their spouse or civil partner. The recipient must not be liable to income tax at the higher or additional rates.

The relief for this allowance is given at 10%.

 

PERSONAL SAVINGS ALLOWANCE

  • Basic rate tax payers: £1,000 (£0)
  • Higher rate tax payers: £500 (£0)
  • Individual Savings Account limit: £20,000 (£0)
  • Junior ISA subscription limit: £9,000 (£0)
  • Child Trust Fund subscription limit: £9,000 (£0)

 

PENSION TAX RELIEF

  • Lifetime allowance: £1,073,100 (£0)
  • Annual allowance: £40,000 (£0)
  • Money purchase annual allowance: £4,000 (£0)
  • Tapered annual allowance: £240,000 (£0)

The annual allowance is reduced by £1 for every £2 of adjusted income over £240,000 to a minimum of £4,000, subject to threshold income being over £200,000

 

CAPITAL GAINS 

  • Capital gains tax allowance: £12,300 (£0)
  • Capital gains tax allowance for couples (Married/Civil Partnership) : £24,600 (£0)
  • Capital gains tax annual exempt amount for most trustees: £6,150 (£0)

 

ADDITIONAL ALLOWANCES

  • Blind Person’s allowance: £2,520 (+£20)
  • Dividend allowance: £2,000 (£0)
  • Rent-a-room relief tax free income: £7,500 (£0)
  • High income child benefit charge: 1% of benefit per £100 adjusted net income of £50,000 to £60,000

Income tax bands and rates

These figures apply to non-dividend income, including income from savings, employment, property or pensions.

Basic Rate 20%: £1 to £37,700

Higher Rate 40%: £37,701 to £150,000

Additional Rate 45%: Over £150,000

Currently there will be no changes on these rates or bands until the 2025/26 tax year.

Savings, dividend income and other tax rates

SAVINGS INCOME

These figures apply to savings income for 2021 to 2022. Starting rate limit for savings is £5,000

  • Savings Starting rate: 0%
  • Savings Basic rate: 20%
  • Savings Higher rate: 40%
  • Savings Additional rate: 45%

 

DIVIDEND INCOME

Dividend rates apply to dividend income received above the £2,000 tax-free Dividend Allowance

  • Dividend ordinary rate: 7.5%
  • Dividend upper rate: 32.5%
  • Dividend additional rate: 38.1%

 

DEFAULT RATES

Default tax rates apply to non-savings and non-dividend income of any taxpayer that is not subject to either the main rates or the Scottish rates of income tax.

  • Default basic rate: 20%
  • Default higher rate: 40%
  • Default additional rate: 45%

 

TRUSTEES’ INCOME

  • Standard rate: Up to 20% (depends on type of income)
  • Dividend trust rate: 38.1%
  • Trust rate: 45%

If you want to understand how to save for your children and grandchildren or how to design your own investment strategy in place don’t hesitate to take a look at one of our financial planning guides, especially the one about planning your finances for the new tax year.

Browse our finance guides

Class 1 NIC (National Insurance Contribution) Employee & Employer

The Government will use the September Consumer Price Index (CPI) figure (0.5%) as the basis for setting all National Insurance limits, thresholds and rates for 2021-22.

NICs rate employee: 12%

NICs rate employer: 13.8%

Most taxable employee benefits: 13.8%

Lower earnings limit: £6,240/year

Primary threshold: £9,568/year

Secondary threshold: £8,840/year

Upper earnings limit: £50,270/year

Upper secondary threshold for under 21s: £50,270/year

Apprentice upper secondary threshold for under 25s: £50,270/year

The figures in brackets are the difference in £s from the previous tax year 2020/21

Self-employed national insurance rates

CLASS 2

  • Flat rate: £3.05pw / £158.60/pa (£-)
  • Small profits threshold: £6,515 pa (+£40)

 

CLASS 3

Covers gaps in a person’s NIC record found on the personal tax account where you will need to pay voluntary contributions. The rate increases from £15.30 to £15.40 in 2021/22.

The figures in brackets are the difference in £s from the previous tax year 2020/21

CLASS 4

If self-employed profits are higher than the lower profits limit (LPL) class 4 NIC will be payable.

  • Lower profit limit 9%: £9,568 pa (+£68)
  • Upper profits limit 2%: £50,270 (+£270)

You can read the government’s more detailed description of all the rates and thresholds for NIC

Inheritance Tax

Rate for estates: 40%

Reduced rate for estates leaving 10% or more to charity: 36%

Rate for chargeable lifetime transfers: 20%

Nil-rate band limit: £325,000

Residence nil-rate band limit: £175,000

Taper threshold for residence nil-rate band: £2,000,000

 

 

 

Capital gains taxes 2021/22

CAPITAL GAINS RATES ON ASSETS

  • Basic rate tax payer: 10%
  • Higher rate tax payer: 20%
  • For trustees basic and higher rate: 20%

 

CAPITAL GAINS RATES ON PROPERTY

  • Basic rate tax payer: 18%
  • Higher rate tax payer: 28%
  • For trustees basic and higher rate: 28%

 

GAINS SUBJECT TO BUSINESS ASSET DISPOSAL 

  • Basic rate tax payer: 10%
  • Higher rate tax payer: 10%

LIFETIME LIMIT ON QUALIFYING GAINS

  • Basic rate tax payer: £10,000,000
  • Higher rate tax payer: £10,000,000

 

GAINS SUBJECT TO INVESTORS’ RELIEF

  • Basic rate tax payer: 10%
  • Higher rate tax payer: 10%

LIFETIME LIMIT ON QUALIFYING GAINS

  • Basic rate tax payer: £10,000,000
  • Higher rate tax payer: £10,000,000

Changing stamp duty tax rates

Stamp duty rates are quite confusing at the moment. Until the 30th June 2021 the special stamp duty rate still applies.

Stamp duty rate from 1st July 2021 to 30th September 2021

£0 to £500,000

Main residence: 0% of the value of property

Additional property: 3% of the value of property

£500,000 to £925,000

Main residence: 5% of the value of property

Additional property: 8% of the value of property

£925,000 to £1.5m

Main residence: 10% of the value of property

Additional property: 13% of the value of property

Over £1.5m

Main residence: 12% of the value of property

Additional property: 15% of the value of property

1st JULY 2021 TO 30th SEPTEMBER 2021

£0 to £250,000

  • Main residence: 0% of the value of property
  • Additional property: 3% of the value of property

£250,000 to £925,000

  • Main residence: 5% of the value of property
  • Additional property: 8% of the value of property

£925,000 to £1.5m

  • Main residence: 10% of the value of property
  • Additional property: 13% of the value of property

Over £1.5m

  • Main residence: 12% of the value of property
  • Additional property: 15% of the value of property

 

1st OCTOBER 2021 ONWARDS

£0 to £125,000

  • Main residence: 0% of the value of property
  • Additional property: 3% of the value of property

£125,000 to £250,000 

  • Main residence: 2% of the value of property
  • Additional property: 5% of the value of property

£250,000 to £925,000

  • Main residence: 5% of the value of property
  • Additional property: 8% of the value of property

£925,000 to £1.5m

  • Main residence: 10% of the value of property
  • Additional property: 13% of the value of property

Over £1.5m

  • Main residence: 12% of the value of property
  • Additional property: 15% of the value of property

If you are a first time buyer: from the 1st July you will pay no stamp duty on a property under £300,000. From £300,000 upwards you will pay the same amount as everybody else.

If you are a non-UK resident: you will be required to pay different stamp duty rates, you can read additional information about all stamp duty land tax rates on the government’s website

 

Financial planning for the new tax year

It isn’t easy getting your head around tax. As you can see taxes on savings, investments and earnings all come with bands, reliefs, allowances and exemptions. How you apply these to your own personal situation is even trickier, especially if you want to make the most of your money.  Sometimes when things get hard to understand we resort to leaving cash in the bank but this impacts on its value.   Knowing how to maximise your tax efficiency plays an important role on your finances, whether you have good money habits or not. If you want to take your financial strategy to the next level you can read one of our financial planning guides or get in touch with one of financial planners who can give your finances an MOT and recommend next steps.

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