UK tax rates 2026-27: income tax, NI, dividend, CGT and IHT

UK tax for individuals is built from a small number of moving parts: a personal allowance, a set of income tax bands, a separate National Insurance schedule, a dividend regime, Capital Gains Tax on disposals, and Inheritance Tax on the value of an estate at death. Business profits sit inside Corporation Tax, with a tiered structure that depends on the size of taxable profit. Scotland applies its own income tax bands to most earned and pension income for Scottish taxpayers, sitting alongside the UK-wide regimes for dividends, savings interest, capital gains, NI and inheritance tax.

This pillar is built for the 2026-27 tax year, which runs from 6 April 2026 to 5 April 2027. The figures below reflect the position carried forward from the most recent Budget cycle and the announced freeze on the personal allowance and basic-rate threshold. Tax thresholds and rates can change at fiscal events and at Scottish Budget announcements, so the figure shown on GOV.UK on the day of action should always be treated as the authoritative number.

The guide is organised by tax type. It explains the headline rates, the thresholds that drive the bill, the most common traps (taper of the personal allowance, the high income child benefit charge, the 60 percent effective marginal band, the dividend stacking rule, the IHT taper near the two million pound mark, and the Corporation Tax marginal relief curve), and how the figures interact when more than one tax applies to the same money.

Income tax rates and bands 2026-27

Income tax in England, Wales and Northern Ireland for 2026-27 uses three main rates stacked above a personal allowance. The first 12,570 pounds of taxable income is covered by the personal allowance and taxed at zero. Income between 12,571 and 50,270 pounds is taxed at the basic rate of 20 percent. Income between 50,271 and 125,140 pounds is taxed at the higher rate of 40 percent. Income above 125,140 pounds is taxed at the additional rate of 45 percent. These thresholds have been held flat under the policy known as fiscal drag, where frozen bands pull more taxpayers into higher rates as wages rise. Verify current figures on GOV.UK before relying on them.

How the bands stack

Income tax bands apply progressively. Each band only applies to the slice of income that falls inside it, not the whole income. A worker on 60,000 pounds of salary pays no tax on the first 12,570 pounds, 20 percent on the next 37,700 pounds and 40 percent on the final 9,730 pounds. The bands are reset each tax year and apply to taxable income from all sources combined: employment, self-employment, rental property after allowable expenses, pensions in payment, and other taxable income such as interest above the personal savings allowance.

Savings interest and the savings allowances

Bank and building society interest is taxed as savings income. Basic-rate taxpayers can receive 1,000 pounds of interest each tax year tax free through the personal savings allowance. Higher-rate taxpayers get 500 pounds. Additional-rate taxpayers do not get a personal savings allowance. There is also a 5,000 pound starting rate for savings band for people whose non-savings income is below the personal allowance plus 5,000 pounds. Cash ISA interest sits outside this regime entirely and is paid free of UK income tax. Verify current allowances on GOV.UK before acting.

Personal allowance and how it tapers

The standard personal allowance for 2026-27 is 12,570 pounds. It applies to most UK taxpayers under state pension age and to most pensioners (the higher age-related personal allowance was removed for new pensioners from 2013-14 onwards). The allowance reduces by 1 pound for every 2 pounds of adjusted net income over 100,000 pounds, and is fully withdrawn by 125,140 pounds. Inside that taper band, every extra pound earned costs 40p in income tax on the additional pound plus 40p of allowance withdrawn (which itself costs another 20p of tax), producing an effective marginal rate of roughly 60 percent. Verify the current taper threshold on GOV.UK before relying on it.

What counts as adjusted net income

Adjusted net income is total taxable income less certain reliefs, principally personal pension contributions paid net (grossed up at the basic rate) and Gift Aid donations grossed up. Pension contributions therefore reduce adjusted net income pound for pound at the gross figure, which can be a powerful way to bring earnings back below the 100,000 pound trigger and recover the personal allowance. The high income child benefit charge uses a similar but separate threshold, so income above 60,000 pounds (verify current trigger on GOV.UK) starts to claw back child benefit through self-assessment.

National Insurance rates and thresholds

National Insurance for employees (Class 1) is charged on earnings above the primary threshold of 12,570 pounds, aligned with the personal allowance. For 2026-27, the main Class 1 employee rate is 8 percent on weekly earnings above the primary threshold and up to the upper earnings limit of 50,270 pounds, with a 2 percent additional rate above the UEL. These figures reflect the rate reductions announced in the 2024 fiscal cycle. Verify current Class 1 employee rates on GOV.UK before relying on them; NI rates have moved several times in recent years.

Employer NI (secondary Class 1)

Employers pay Class 1 secondary contributions on employee earnings above the secondary threshold. The main employer rate is 15 percent (verify current figure on GOV.UK), with reliefs for under-21s, apprentices under 25, and qualifying veterans. The Employment Allowance reduces an eligible employer's annual NI bill by up to a stated amount; the eligibility test excludes companies where the sole employee is also a director.

Self-employed NI: Class 2 and Class 4

Self-employed people pay Class 4 NI on annual profits, at 6 percent (verify) between the lower profits limit (12,570 pounds, aligned with the personal allowance) and the upper profits limit (50,270 pounds), and 2 percent above the UPL. Class 2 NI was effectively abolished as a compulsory charge for those above the small profits threshold; voluntary Class 2 contributions remain available to protect state pension entitlement for those below the threshold.

NI and the state pension age

Class 1 and Class 4 NI stop being due once an individual reaches state pension age. Employers still pay secondary NI on earnings paid to staff over state pension age. State pension entitlement is built from qualifying years of NI contributions or credits; a full new state pension requires 35 qualifying years. Voluntary Class 3 contributions can fill gaps for tax years going back six years (with extensions for specific cohorts; verify on GOV.UK).

Dividend tax: allowance and rates

Dividends sit on top of other taxable income for the purpose of identifying which dividend rate applies. For 2026-27, the dividend allowance is 500 pounds. Dividends within the allowance are taxed at zero. Above the allowance, dividends in the basic-rate band are taxed at 8.75 percent, dividends in the higher-rate band at 33.75 percent and dividends in the additional-rate band at 39.35 percent. Verify current figures on GOV.UK before acting. Dividends from shares held in an ISA or pension are not taxable income for these purposes.

How dividends interact with the bands

Dividend income is treated as the top slice of total income, sitting above earned income and savings interest. That means a basic-rate taxpayer who tips into the higher-rate band because of dividends pays the higher dividend rate on the part of the dividend above the threshold. A worked example: 50,000 pounds of salary plus 5,000 pounds of dividends, with a 12,570 pound personal allowance, gives 37,430 pounds of salary in the basic-rate band, 270 pounds of salary remaining in the basic-rate band, 500 pounds of dividend covered by the allowance, then dividend stacking begins. The first 270 pounds of taxable dividend uses the rest of the basic-rate band at 8.75 percent; the remaining 4,230 pounds is taxed at 33.75 percent.

Owner-managed companies

For directors of owner-managed companies, dividends are often combined with a small salary to optimise the overall tax cost of extracting profit. The Corporation Tax change to a tiered 19 percent / 25 percent structure, the reduction of the dividend allowance to 500 pounds, and the changes to NI rates have changed the maths since the era of large dividend allowances. Anyone planning a remuneration strategy should run the numbers under current rates and consult a qualified accountant.

Capital Gains Tax rates and the annual exempt amount

Capital Gains Tax is charged on the gain (sale proceeds less allowable cost and qualifying reliefs) when an individual disposes of a chargeable asset. The annual exempt amount for 2026-27 is 3,000 pounds (verify on GOV.UK before relying on it). Gains within the AEA are not taxable. Above the AEA, the main rates are 18 percent for gains that fall within a person's basic-rate band and 24 percent for gains that fall above it. The 30 October 2024 Budget aligned non-residential CGT rates with residential rates; the previous 10 percent and 20 percent main rates no longer apply for new disposals. Verify the current main rate split and the position for trustees and personal representatives before acting.

Business Asset Disposal Relief and Investors' Relief

Business Asset Disposal Relief (formerly Entrepreneurs' Relief) gives a reduced CGT rate on qualifying disposals of all or part of a business, with a lifetime limit of 1 million pounds. The BADR rate is 14 percent from 6 April 2025, rising to 18 percent from 6 April 2026, following the rate changes announced in the 30 October 2024 Budget. Investors' Relief has a separate lifetime limit (reduced to 1 million pounds for disposals from 30 October 2024). Verify current BADR and IR rates on GOV.UK before relying on them.

Residential property and 60-day reporting

UK residential property gains realised by a UK resident must be reported and the tax paid within 60 days of completion, using HMRC's Property Disposal service. Non-residents must report all UK property disposals (residential, non-residential and indirect disposals through property-rich entities) within 60 days. Failure to report and pay on time triggers interest and penalties under Schedule 55 and Schedule 56 of the Finance Act 2009.

Reliefs, losses and the share matching rules

Allowable capital losses can be set against gains in the same tax year, with any excess carried forward indefinitely against future gains (provided the loss is claimed in a self-assessment return within four years of the end of the tax year in which it arose). The share matching rules in section 105 TCGA 1992 (same-day, then 30-day "bed and breakfast" rule, then section 104 holding) determine which acquisition matches a disposal of fungible shares. Anti-avoidance rules prevent realising a loss and immediately repurchasing.

Inheritance Tax: nil-rate band and residence nil-rate band

Inheritance Tax is charged on the value of an estate at death and on certain lifetime gifts. The nil-rate band is 325,000 pounds, frozen since 2009 and currently legislated to stay at that level into the late 2020s. The residence nil-rate band of 175,000 pounds applies where a main residence (or its value) passes to a direct descendant. The combined nil-rate bands available to a married couple or civil partners, including any transferable amount from a deceased spouse who did not use their full bands, can reach 1 million pounds in the right circumstances. The main IHT rate above the available nil-rate bands is 40 percent. Estates that leave at least 10 percent of the net estate to charity benefit from a reduced 36 percent rate on the qualifying portion. Verify current bands and rates on GOV.UK before relying on them.

RNRB taper

The residence nil-rate band is tapered by 1 pound for every 2 pounds of estate value above 2 million pounds, fully withdrawn at estate values around 2.35 million pounds (depending on whether transferable nil-rate band is in play). Larger estates can lose the RNRB entirely. Plans to mitigate the taper usually involve lifetime gifting, charitable legacies, or trust arrangements; the rules are technical and the seven-year clock applies.

Potentially Exempt Transfers and the seven-year clock

Most outright gifts to individuals are Potentially Exempt Transfers. They fall outside the estate if the donor survives seven years from the date of the gift. Gifts made within three to seven years of death may attract taper relief, reducing the IHT rate on the gift portion above any available nil-rate band (taper relief reduces the tax, not the value of the gift). Annual exemptions of 3,000 pounds (which can be carried forward one year if unused), small gifts up to 250 pounds per recipient, normal expenditure out of income, and gifts in consideration of marriage all sit outside the seven-year clock.

Trusts and the relevant property regime

Most lifetime gifts into trust are Chargeable Lifetime Transfers, immediately taxable at 20 percent on the value above the available nil-rate band (rising to 40 percent if the settlor dies within seven years). Trusts within the relevant property regime are subject to 10-year anniversary charges and exit charges, capped at 6 percent of the chargeable amount. Bare trusts and certain trusts for disabled beneficiaries sit outside the relevant property regime.

Business Property Relief and Agricultural Property Relief from April 2026

Business Property Relief and Agricultural Property Relief give 100 percent or 50 percent relief on qualifying business and agricultural assets. From 6 April 2026, the combined BPR and APR available at the 100 percent rate is capped at 1 million pounds per estate, with relief above that cap restricted to 50 percent (an effective 20 percent IHT rate on the excess). The 100 percent BPR on AIM-quoted shares is reduced to 50 percent from the same date. Verify the implementation detail on GOV.UK and the legislation when published; transitional rules may apply.

Corporation Tax rates

Corporation Tax is charged on the worldwide profits of UK-resident companies and on the UK profits of non-UK companies with a UK permanent establishment. The main rate is 25 percent on taxable profits above 250,000 pounds. The small profits rate is 19 percent on taxable profits up to 50,000 pounds. Between 50,000 and 250,000 pounds, marginal relief applies, taking the effective rate from 19 percent to 25 percent on a sliding scale. Associated companies are counted together when applying the thresholds, so companies under common control share the bands. Verify current rates and threshold treatment on GOV.UK and in the Corporation Tax Act 2010 before relying on them.

Marginal relief mechanics

Marginal relief is calculated using the standard fraction (currently 3/200). The effective marginal rate on profits between 50,000 and 250,000 pounds is 26.5 percent, because the relief withdraws the small profits rate gradually as profits rise. A company with profits of 100,000 pounds pays 25 percent on 100,000 pounds (25,000 pounds) less marginal relief, producing an effective bill below 25 percent. HMRC publishes a marginal relief calculator on GOV.UK; the inputs are accounting period dates, taxable profit, and the number of associated companies.

Associated companies and 51 percent groups

The 50,000 and 250,000 pound thresholds are divided by the number of associated companies, including the company itself. Associated company status is broader than the former 51 percent group test; it can capture companies controlled by the same person or persons, by attribution of associates' rights in some cases. Dormant companies are usually excluded. The rule reduces the planning value of fragmenting a business across multiple small companies to access the 19 percent rate.

Capital allowances and full expensing

Full expensing gives companies a 100 percent first-year allowance on qualifying new plant and machinery, with a 50 percent first-year allowance for special rate pool assets. Full expensing was made permanent from April 2024. The Annual Investment Allowance gives a 100 percent allowance on the first 1 million pounds of qualifying expenditure across most plant and machinery, available to unincorporated businesses and groups that cannot use full expensing. Structures and Buildings Allowance gives 3 percent straight-line relief on qualifying non-residential construction costs.

Scottish income tax bands

Scottish income tax applies to most non-savings, non-dividend income of Scottish taxpayers. Residency for Scottish taxpayer status is determined by where the individual has their main place of residence in the UK during the tax year. Scotland sets its own income tax rates and bands under the Scotland Act 2016. The Scottish framework uses six bands: starter, basic, intermediate, higher, advanced and top. Specific 2026-27 rates and thresholds are set by the Scottish Budget; verify current Scottish bands on the revenue.scot or gov.scot pages before relying on them.

The framework

Recent Scottish Budgets have applied a starter rate of 19 percent on a small slice of income above the personal allowance, a basic rate of 20 percent, an intermediate rate of 21 percent, a higher rate around 42 percent, an advanced rate around 45 percent and a top rate around 48 percent. The higher and advanced thresholds have moved separately from the UK higher-rate threshold, which means Scottish taxpayers in the upper bands pay more income tax on earned income than equivalent earners in England, Wales or Northern Ireland. Confirm the current rate set on the Scottish Government's tax pages.

What Scotland does not tax separately

The Scottish Parliament does not set the rates for savings income, dividend income, Capital Gains Tax, Inheritance Tax, Corporation Tax or National Insurance. Those follow the UK regime. A Scottish taxpayer with dividend income pays UK dividend rates (8.75, 33.75 or 39.35 percent) using the UK higher-rate threshold to identify the band, not the Scottish higher-rate threshold.

Scottish tax codes

HMRC operates Scottish taxpayer status through a tax code with an "S" prefix (for example "S1257L"). Employers and pension providers apply the Scottish code through PAYE. Scottish taxpayer status is set for a full tax year, even if the person moves out of Scotland part way through (subject to the residency test that uses days of residence and main place of residence over the year).

How we verified this

The income tax rates and bands reflect the published GOV.UK pages on Income Tax rates and Personal Allowances, and the legislation in the Income Tax Act 2007 (and Finance Acts since). The personal allowance taper above 100,000 pounds is set out in section 35 ITA 2007. National Insurance rates are confirmed against the GOV.UK National Insurance rates pages and HMRC's National Insurance Manual. Dividend tax rates and the dividend allowance reflect the GOV.UK dividend tax pages and the relevant Finance Acts. Capital Gains Tax rates, the annual exempt amount and the rate changes from the 30 October 2024 Budget are taken from the GOV.UK Capital Gains Tax pages and HMRC's CGT Manual. Inheritance Tax rules, including the nil-rate band, residence nil-rate band, taper and the announced BPR/APR reforms from 6 April 2026, reflect GOV.UK guidance, the Inheritance Tax Act 1984 and the relevant Finance Bill provisions. Corporation Tax rates and marginal relief reflect the Corporation Tax Act 2010 (sections 18 to 24 and Schedule 1A) and the GOV.UK rates pages. Scottish income tax bands are taken from the Scottish Government's tax pages and Revenue Scotland publications. Every figure should be reconfirmed on the relevant primary-source page before any tax position is taken; fiscal events can change thresholds at short notice.

Frequently asked questions

What is the UK personal allowance for 2026-27?

The standard personal allowance is 12,570 pounds and has been frozen at that level. The allowance tapers above 100,000 pounds of adjusted net income, withdrawn at 1 pound for every 2 pounds over the threshold, and is fully removed by 125,140 pounds. Verify the current figure on GOV.UK before acting on it.

What are the income tax rates for England, Wales and Northern Ireland?

Taxable income above the personal allowance is charged at 20 percent up to 50,270 pounds (basic rate), 40 percent up to 125,140 pounds (higher rate), and 45 percent above (additional rate). Rates apply progressively, slice by slice, not to the whole income at the top rate.

Why is there a 60 percent effective tax rate around 100,000 pounds?

Between 100,000 and 125,140 pounds of adjusted net income, every extra pound earned attracts 40 percent income tax and also withdraws 50p of personal allowance, which is itself taxed at 20 percent. The combined effect produces an effective marginal rate of roughly 60 percent on income in that band.

How can the personal allowance taper be reduced?

Adjusted net income is reduced by gross personal pension contributions and Gift Aid donations grossed up at the basic rate. Increasing pension contributions or making qualifying charitable donations can pull adjusted net income below the 100,000 pound trigger and restore the personal allowance. The relief is claimed through self-assessment or PAYE coding.

What is the high income child benefit charge?

The charge claws back child benefit through self-assessment once the higher earner's adjusted net income exceeds a published threshold. The current trigger has moved in recent fiscal events; verify the threshold on GOV.UK. The charge withdraws benefit gradually up to a complete claw-back at a higher figure.

What are the current National Insurance rates?

For 2026-27, the main Class 1 employee rate is 8 percent on earnings between 12,570 and 50,270 pounds, with 2 percent above the upper earnings limit. The self-employed pay Class 4 NI at 6 percent and 2 percent over the same thresholds. Verify current rates on GOV.UK; NI rates have been adjusted multiple times since 2022.

Do I pay NI on pension income?

No. National Insurance is not charged on UK pension income, including state pension, defined benefit pensions and drawdown income. NI stops being due on earned income once the individual reaches state pension age, although employer NI continues on wages paid to staff over state pension age.

How is the dividend allowance taxed?

The first 500 pounds of dividend income each tax year is covered by the dividend allowance and taxed at zero. Dividends above the allowance are taxed at 8.75 percent if they fall in the basic-rate band, 33.75 percent in the higher-rate band, and 39.35 percent in the additional-rate band. Dividends sit on top of other income to determine the applicable rate.

Are ISA dividends taxable?

No. Dividends from shares held in a stocks and shares ISA are not taxable for UK tax purposes and do not use the 500 pound allowance. The same applies to dividends held inside a pension.

What is the Capital Gains Tax annual exempt amount?

For 2026-27 the annual exempt amount is 3,000 pounds, sharply reduced from the 12,300 pound figure used until 2022-23. Gains within the AEA are not taxable. Verify the current figure on GOV.UK; the AEA for trustees is half the individual amount.

What are the current Capital Gains Tax rates?

Following the 30 October 2024 Budget, the main CGT rates are 18 percent for gains within the basic-rate band and 24 percent for gains above it. These apply to most asset classes, including residential property, after the alignment of non-residential and residential CGT rates. Verify the current rate position on GOV.UK before acting.

When do I have to report a UK residential property gain?

Within 60 days of completion. UK residents use HMRC's Property Disposal service to report and pay any CGT due on a UK residential property disposal. Non-residents must report all UK property disposals within 60 days, including residential, non-residential and indirect disposals through property-rich entities.

What is Business Asset Disposal Relief in 2026-27?

Business Asset Disposal Relief gives a reduced CGT rate on qualifying disposals of all or part of a business, with a lifetime limit of 1 million pounds. The BADR rate is 18 percent from 6 April 2026, up from 14 percent in 2025-26 and 10 percent before April 2025. Verify current BADR rates on GOV.UK before relying on them.

What is the Inheritance Tax nil-rate band?

The IHT nil-rate band is 325,000 pounds, frozen at that level. Estates above the available nil-rate bands are taxed at 40 percent on the excess. A 36 percent reduced rate applies where at least 10 percent of the net estate (after exemptions and reliefs) is left to qualifying charities.

How does the residence nil-rate band work?

The residence nil-rate band of 175,000 pounds applies where a qualifying main residence (or its value) passes to a direct descendant such as a child or grandchild. It is tapered above estate values of 2 million pounds and can be fully withdrawn at higher estate values. Unused RNRB is transferable to a surviving spouse or civil partner.

Are gifts always taxed for Inheritance Tax?

No. Outright gifts to individuals are Potentially Exempt Transfers and fall outside the estate if the donor survives seven years. The annual 3,000 pound exemption, small gifts of up to 250 pounds per recipient, normal expenditure out of income and certain wedding gifts are immediately exempt. Gifts to a spouse or civil partner who is UK domiciled (or for whom an election applies) are wholly exempt.

What is the seven-year IHT taper?

Taper relief reduces the IHT due on a failed PET (a gift made within seven years of death) above the available nil-rate band. The relief slides from no reduction in the first three years to 20 percent, 40 percent, 60 percent and 80 percent over years three to seven. The taper reduces the tax, not the value of the gift.

What is changing for Business Property Relief in April 2026?

From 6 April 2026, the combined value of business and agricultural assets qualifying for 100 percent BPR or APR is capped at 1 million pounds per estate. Relief above the cap is restricted to 50 percent, giving an effective IHT rate of 20 percent on the excess. AIM-quoted shares qualifying for BPR will only attract 50 percent relief from the same date. Verify the precise implementation details on GOV.UK.

What are the Corporation Tax rates?

The main rate is 25 percent on taxable profits above 250,000 pounds. The small profits rate is 19 percent on profits up to 50,000 pounds. Marginal relief applies between 50,000 and 250,000 pounds, producing an effective marginal rate of 26.5 percent in that band. Associated companies share the thresholds.

How does Corporation Tax marginal relief work?

The standard marginal relief fraction is 3/200. The tax is calculated at 25 percent on the whole profit, then reduced by an amount calculated as the fraction multiplied by (upper limit minus augmented profits). HMRC publishes a marginal relief calculator on GOV.UK; the inputs are accounting period dates, taxable profit and the number of associated companies.

What are associated companies?

For Corporation Tax purposes, a company is associated with another if one controls the other or both are controlled by the same person or persons. The thresholds for the small profits rate and marginal relief are divided by the number of associated companies plus the company itself. Dormant companies are normally excluded. The rule limits the planning value of operating through several small companies.

Does Scotland set its own income tax?

Scotland sets the rates and bands for non-savings, non-dividend income for Scottish taxpayers under the Scotland Act 2016. There are six Scottish bands: starter, basic, intermediate, higher, advanced and top. Specific rates and thresholds are set at each Scottish Budget; verify the current Scottish figures on revenue.scot and gov.scot before acting.

Who is a Scottish taxpayer?

A Scottish taxpayer is a UK resident whose main place of residence in the UK during the tax year is in Scotland (subject to specific tests for those with multiple homes or who move). Scottish taxpayer status is set for a complete tax year and applied through a PAYE tax code with an "S" prefix.

Does Scotland tax dividends and savings interest differently?

No. Dividend tax, savings interest tax, Capital Gains Tax, Inheritance Tax and National Insurance are reserved to the UK Parliament and apply UK-wide rules to Scottish taxpayers. Only earned income, pension income and most self-employed profit use the Scottish bands.

How is rental income taxed?

Rental profit from UK property is taxed as non-savings income at the relevant income tax rates. The 1,000 pound property allowance can be claimed against gross rental receipts instead of actual expenses. Mortgage interest on residential lettings is restricted to a 20 percent basic-rate tax credit under section 272A ITTOIA 2005; full deduction remains available for furnished holiday lets and commercial property.

What is the pension annual allowance?

The standard annual allowance limits total tax-relieved pension input at 60,000 pounds, with tapering for high earners and a reduced money purchase annual allowance after flexibly accessing benefits. Personal contributions attract relief up to the higher of 3,600 pounds gross or 100 percent of relevant UK earnings.

Are state pension payments taxable?

Yes. State pension is taxable income but is paid without tax deducted. HMRC adjusts the tax code on other PAYE income to collect the tax due. People with no other PAYE income may need to register for self-assessment.

What is the personal savings allowance?

Basic-rate taxpayers can receive 1,000 pounds of interest each tax year without paying tax. Higher-rate taxpayers receive 500 pounds. Additional-rate taxpayers do not get a personal savings allowance. ISA interest sits outside the regime entirely.

When do I need to file a self-assessment return?

Broadly, a return is required where untaxed income such as rental or self-employed profit exceeds 1,000 pounds, where the high income child benefit charge applies, where Capital Gains Tax is due, or where HMRC has issued a notice to file. The online filing deadline is 31 January after the tax year.

Can the same income be taxed twice?

Double taxation can arise when the same income is taxable in two countries. The UK has an extensive double-tax treaty network giving one country primary taxing rights and the other giving credit or exemption. Where no treaty applies, unilateral foreign tax credit relief under section 18 TIOPA 2010 can still apply.