Key tax rates, limits and allowances: Your at-a-glance guide
INVESTMENTS
06 April 2025, 5 minute read
Here’s our run-down of all the key tax rates, limits and allowances you need to know for the 2025-26 tax year. When it comes to using ISA and pension allowances, remember you don't have to make your investment choices straight away – as long as you have the cash in place this tax year, that’s enough to secure the tax benefits of this year’s allowances.
Who's it for? All investors
The value of investments can fall as well as rise and you could get back less than you invest. If you’re not sure about investing, seek independent advice.
Tax rates, allowances and bands often change when one tax year finishes and a new one begins.
Knowing what they are can help you work out how much tax you’ll pay each year and ensure that you make the most of all exemptions and reliefs available to you.
Rates and allowances for the current tax year, which runs from 6 April 2025 to 5 April 2026, and for reference the 2024-25 tax year too, are shown here.
Remember, tax rules can change in future and their effects on you will depend on your individual circumstances.
Personal Allowances
The tax-free Personal Allowance is the amount of income you can earn before you have to start paying tax. All individuals are now entitled to the same personal allowance, regardless of their age.
The personal allowance is reduced by £1 for every £2 of an individual's adjusted net income above £100,000 potentially removing the allowance in full.
The allowances shown below are available to certain individuals in addition to the personal allowance above.
|
Allowance |
2024-25 |
2025-26 |
|---|---|---|
|
Blind person’s allowance |
£2,600 |
£2,600 |
|
Transferable personal allowance |
£1,260 |
£1,260 |
A spouse or civil partner who isn’t liable to income tax above the basic rate may transfer £1,260 in the 2025-26 tax year of their unused personal allowance to their spouse or civil partner, as long as the recipient isn’t liable to income tax above the basic rate.
Married couple’s allowance where one spouse or civil partner was born before 6 April 1935:
|
Allowance |
2024-25 |
2025-26 |
|---|---|---|
|
Maximum amount of married couple's allowance |
£10,375 |
£10,375 |
|
Minimum amount of married couple's allowance |
£4,010 |
£4,010 |
This allowance is subject to a £34,600 income limit in the 2025-26 tax year. The individual’s married couple’s allowance is reduced by £1 for every £2 above this limit. Tax relief for married couple’s allowance is given at a rate of 10%.
Personal Savings Allowance
The Personal Savings Allowance (PSA) means around 95% of savers don’t pay any tax on the interest they earn on their savings.
Basic rate taxpayers will not have to pay tax on the first £1,000 of their savings income.
Higher rate taxpayers will not have to pay tax on the first £500 of their savings income.
There is no personal savings allowance for additional rate taxpayers.
|
Income Tax rates |
2024-25 |
2025-26 |
|---|---|---|
|
Tax rate |
Taxable income above your Personal Allowance |
Taxable income above your Personal Allowance |
|
Nil rate Personal Allowance |
Up to £12,570 |
Up to £12,570 |
|
Basic rate 20% |
£12,571 to £50,270 |
£12,571 to £50,270 |
|
Higher rate 40% |
£50,271 to £125,140 |
£50,271 to £125,140 |
|
Additional rate 45% |
Over £125,410 |
Over £125,410 |
Scottish rates and bands
|
Bands |
Band name |
2024-25 rate |
2025-26 rate |
|---|---|---|---|
|
£12,571* - £14,732 |
Starter Rate |
19% |
19% |
|
£14,733 - £25,688 |
Scottish Basic Rate |
20% |
20% |
|
£25,689 - £43,662 |
Intermediate Rate |
21% |
21% |
|
£43,663 - £150,000** |
Higher Rate |
41% |
42% |
|
Above £150,001 |
Top Rate |
46% |
47% |
* Assumes individuals are in receipt of the standard Personal Allowance.
** Those earning more than £100,000 will see their Personal Allowance reduced by £1 for every £2 earned over £100,000. [source: www.gov.scot]
Savings income and dividend tax rates
All taxpayers have an annual tax-free dividend allowance of £500, so only dividend income above this allowance is taxed.
The dividend allowance is in addition to your personal allowance. In 2025-26 the personal allowance is £12,570. This means that if you receive £13,070 in dividend income next tax year, the first £12,570 could be covered by the personal allowance and the remaining £500 by the dividend allowance, so no tax would be payable (assuming you receive no other income).
|
Tax rates for dividends above £500 |
2024-25 |
2025-26 |
|---|---|---|
|
Basic Rate and non taxpayers |
8.75% |
8.75% |
|
Higher rate taxpayers |
33.75% |
33.75% |
|
Additional rate taxpayers |
39.35% |
39.35% |
Tax-free savings account allowances
|
Account |
2024-25 |
2025-26 |
|---|---|---|
|
Individual savings account (ISA) allowance |
£20,000 |
£20,000 |
|
Junior ISA subscription limit |
£9,000 |
£9,000 |
|
Child trust fund |
£9,000 |
£9,000 |
You can use your full £20,000 allowance in an investment ISA, or split however you want across a cash ISA, investment ISA, lifetime ISA (max £4,000), and an innovative finance ISA.
Pensions
|
Allowance |
2024-25 |
2025-26 |
|---|---|---|
|
Annual Allowance |
Most people are able to pay £60,000 or the total value of your annual earnings, whichever is lower into pensions. Check that you’re not affected by the exceptions below. |
Most people are able to pay £60,000 or the total value of your annual earnings, whichever is lower into pensions. Check that you’re not affected by the exceptions below. |
The annual allowance restricts the amount of pension contributions you can make each year while still receiving tax relief. Provided you meet certain conditions, you can carry forward any unused allowances from the previous three tax years, as long as any pension contributions you personally make do not exceed your earnings in the current tax year.
Exceptions:
1. If your ‘adjusted income’ is greater than £260,000, you lose £1 of your annual allowance for every £2 of income over £260,000, up to a maximum reduction of £50,000, so this tapered allowance can drop to £10,000. Adjusted income includes both personal and employer pension contributions. This tapered reduction doesn’t apply to anyone with ‘threshold income’ of no more than £200,000. Threshold income excludes pension contributions. Your annual allowance will therefore only be reduced if both your ‘threshold income’ is above £200,000 and your ‘adjusted income’ is over £260,000.
So, for example, if your total taxable income is more than £260,000 and you contribute the full allowance of £60,000, you might be affected, as your adjusted income will be over £260,000, and your threshold income is over £200,000.
2. From the point that you draw certain taxable pension income benefits, your annual Defined Contribution pension allowance is replaced permanently by the Money Purchase Annual Allowance (MPAA) of £10,000. You’re also no longer able to carry forward any unused annual allowance from previous tax years. However, note that this does not affect what you can build in a Defined Benefit pension each year.
National Insurance Contributions – lower earnings limit (below which they aren't paid)
|
2024-25 |
2025-26 |
|---|---|
|
£123 per week |
£123 per week |
Inheritance Tax
|
Allowance |
2024-25 |
2025-26 |
|---|---|---|
|
Personal allowance |
Up to £325,000 + £175,000 residence allowance |
Up to £325,000 + £175,000 residence allowance |
|
Couple's allowance |
Up to £650,000 + £350,000 residence allowance |
Up to £650,000 + £350,000 residence allowance |
Inheritance tax is payable at a rate of 40% above these thresholds. In the 2025-26 tax year, everyone is entitled to an additional £175,000 tax-free allowance which can be used against the value of their home. This allowance may only be used when you leave your home to your children or grandchildren. This allowance will be reduced for estates with a net value exceeding £2m, by £1 for every £2 that the estate exceeds this amount.
Chancellor Rachel Reeves has extended the Inheritance Tax threshold freeze until 2030.
Starting in April 2027, inherited pensions, including SIPPs, will be subject to Inheritance Tax.
Agricultural and business property relief will change from April 2026. The first £1 million will continue to be tax free, but over £1 million will receive 50% relief (resulting in a 20% tax rate).
Capital gains tax allowance
|
Allowance |
2024-25 |
2025-26 |
|---|---|---|
|
Individuals |
£6,000 |
£3,000 |
If you invest outside of an ISA or a SIPP, any profits above the annual CGT allowance are subject to 18% and 24% depending on your tax band.
CGT on residential property generally does not apply to your main home, only to additional properties (such as a flat you let out).
Since April 2016, there has been an additional surcharge to be paid on residential property and carried interest (the share of profits or gains that is paid to asset managers).
Basic rate taxpayers will pay 18% and higher rate taxpayers would pay 24% on such a gain over the annual allowance.
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