Tax allowances for 2024/25

Personal Allowance*		£12,570*
Married Couple's Allowance (MCA)†	One or both born before 6th April 1935	£11,080†
MCA limit		£37,000
Blind Person's Allowance¶		£3,070¶
Marriage Allowance‡		£1,260‡
Personal Savings Allowance Basic rate taxpayer Higher rate taxpayer Additional rate taxpayer		£1,000 £500 £0
0% savings rate		£5,000
Dividend Allowance		£500

^*Note: The Personal Allowance is reduced for those with total incomes over £100,000 by £1 for every £2 over this amount. This means Personal Allowance becomes zero at income of £125,140 or above.

^†Note: Married couple's allowance (MCA) is restricted to 10% of the value and reduces tax due and is not tax-free income. It is only available where at least one spouse is born before 6 April 1935. It is also withdrawn by £1 for every £2 of income above the limit of £37,000 until reaching the minimum allowance of £4,280, (i.e. where income of £50,600 or more) reducing tax payable by £428.

^¶Note: Blind person's allowance can be claimed by those who are registered severely sight impaired (SSI) with a local authority. You do not have to be totally sightless to be registered blind. Any part of this allowance that is unused by the recipient can be transferred to their spouse or civil partner. If either spouses or civil partners are registered blind, they will both get the allowance. Eligibility rules are slightly different in Scotland.

^‡Note: Marriage Allowance is available to married couples and civil partners where both parties are no more than basic rate taxpayers and one party wants to transfer 10% of their personal allowance (2024/25 personal allowance is £12,570) to the other. This is usually where there is unused allowance available because one is a non-taxpayer. It effectively reduces the recipient’s tax bill by up to £252 for 2024/25 but can only reduce their tax bill to zero. If you claim the married couple’s allowance above you cannot claim this one. Where a partner has died before the claim was made, claims can be backdated by up to 4 years.

Personal Savings Allowance (PSA): This allowance means that £1,000 (basic rate taxpayers) of your savings income such as bank interest are not taxable (£500 for higher rate taxpayers, zero for additional rate). It is separate and additional to the starting rate for savings income, for those eligible for both. They act together to mean that if you add up your total income, including savings income, and it is below £18,570 you won’t have to pay tax on your it.

Dividend Allowance: The first £500 of dividends will not be taxed. Any dividend payments over this amount will be taxed by reference to a person’s marginal rate. To determine what your marginal rate is, add up all of your taxable income including saving income and dividends, with dividends being the top part and then check the table below to see which tax rate applies to you.

Tax rates and bands for 2024/25

Income tax rates
Basic rate: first £37,700 of taxable income*	20%*
Higher rate: £37,701 - £150,000*	40%*
Additional rate: £150,000+*	45%*
Savings
Starting rate: for interest falling in first £5,000 of income above Personal Allowance†	0%†
Savings are taxed at 20% for basic rate taxpayers, 40% for higher rate taxpayers and 45% for additional rate taxpayers†
Dividends
Dividend income above the allowance but falling within basic rate tax limit	8.75%
Dividend income falling between £37,701 and £150,000	33.75%
Dividend income falling above £150,000	39.35%
Inheritance tax
Inheritance tax Nil Rate Band (NRB)	£325,000
Residential Nil Rate Band (RNRB)	£175,000
Inheritance tax rate above NRB	40%
Capital gains tax
Annual exemption: individual	£3,000
Annual exemption: trust	£1,500
Capital Gains tax rate on excess gains up to basic rate limit¶	10%¶
Capital Gains tax rate on excess gains above basic rate limit¶	20%¶

^*In Scotland six tax bands apply for the 2024/25 tax year. The first £2,306 over the personal allowance of £12,570 is taxed at 19%, the next £11,685 at 20%, the next £17,101 at 21%, the next £31,338 at 42%, the remaining £50,140 up to £125,140 at 45% and then 48% thereon.

^†Only applies if your other (non-savings) income is below your allowances plus £5,000 for this tax year. Where non-savings income exceeds allowances the £5,000 is reduced, eventually being eliminated. Also consider the personal savings allowance mentioned above.

^¶18%/24% for gains from residential property and 18%/28% for gains from carried interest.

Note: Scottish taxpayers should use the English rates and bands for their savings and investment income.

Note: If you live in Wales, from 6th April 2019 you are potentially subject to Welsh income tax rates, set by the Welsh Government. For the 2024/25 tax year, they are the same as the main rates and allowances listed above, as for England and Northern Ireland.

Rent a Room: The allowance is £7,500.

Property and trading income allowances: Individuals with property income or trading income below £1,000 do not need to declare or pay tax on that income. Those with income above the allowance will be able to calculate their taxable profit either by deducting their expenses in the normal way or by simply deducting the relevant allowance.

Further points

Help to Save: The Help to Save scheme was launched to help people on low-incomes claiming universal credit or working tax credits to save. Help to Save pays a 50% bonus on the amount saved, up to a maximum bonus of £1,200 over four years The bonus is paid after two years with an option to save for a further two years, meaning that people can save up to £2,400 and benefit from government bonuses worth up to £1,200. You can save between £1 and £50 per month, but you don't have to save every month. People are able to use the funds in any way they wish.

ISA contribution limit: You can save up to a maximum of £20,000 per year (for 2024/25), and this can be in a cash ISA, a stocks & shares ISA, an innovative finance ISA, a Lifetime ISA or a mixture of all of them.

If you are having problems with tax, call Tax Help on 01308 488066