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Know your limits! New tax thresholds for 2018/19

Know your limits!

  • Personal allowance has increased to £11,850, but individuals earning over £100,000 lose their personal allowance by £1 for every £2 over this threshold, meaning an effective 60% tax rate between £100,000 and £123,700
  • Basic rate tax band has increased to £34,500, meaning you do not pay 40% tax until you earn income of over £46,350
  • Dividend allowance has reduced to £2,000 from its original level of £5,000. The reduction in the dividend allowance will cost a basic rate taxpayer £225 a year; a higher rate taxpayer £975 a year and an additional rate taxpayer £1,143 a year
  • Capital gains annual exemption has increased to £11,700
  • Inheritance tax residence nil rate band has increased to £125,000
  • Individual landlords will only be able to deduct 50% of their mortgage interest (reduced from 75%) against rental income, with the remaining 50% available as a basic rate tax credit

Talk to us if you need clarification or more detail.

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