Personal Taxation
The three parties contesting the General Election on a UK wide basis have now published their manifestos. We have examined their pledges on personal taxation.
Taxation Now | Conservative | Labour | Liberal Democrat |
Income Tax rates and allowances [1]. First £12,500 0%, £5,000 savings 0%, up to £50,000 20% allowance, £50,001 40%, £150,000 45%. |
Freeze income tax rates and maintain current bands. 40% on incomes over £50,000, 45% for incomes over £150,000. |
Increase tax for incomes over £80,000 to 45% and £125,000 50%. |
Increase all rates by 1p to 21% up to £50,000, 41% over £50,000, 46% over £150,000. |
Marriage Allowance |
No change |
Abolished |
Abolished |
National Insurance |
Increase the starting band to earnings of £9,500 pa saves £100 pa. Ambition to increase to £12,500 over 5 years. |
No change |
No change |
Income from Savings Interest. |
No change |
No change to |
No change to allowances. |
Dividend Income |
No change |
Reduction in dividends allowance to £1,000. Taxed as income at 20%,40%,45% and 50%. |
Abolish dividends |
Capital Gains |
No change, allowance of £12,000 pa, 10% and 20% rates, 18% and 28% on residential property not main home. |
Reduce allowance to £1,000, increase tax rate to income tax rates when gain added to income, so 20%, 40%, 45%, 50%. |
Abolish separate |
Inheritance Tax Tax on estates of If left to spouse exempt |
Estates may leave £325,000 tax free, if estate includes main residence up to £175,000 tax free from April (£150,000 currently) 40% tax on balance. |
Abolish the residence nil rate band currently £150,000, rising to £175,000 from April. |
No detailed policy set out on existing reliefs [2]. |
Inheritance Tax on |
No change |
Not in the manifesto, but support from Labour for a tax on recipients of gifts exceeding £125,000 over a lifetime at income tax rates. |
Recipient of the gift to be taxed once the cumulative lifetime allowance of £250,000 has been received. Not clear what the rate of tax would be. Would retain spouse exemption, some business property exemption and gifts for education. |
Second Homes Tax |
No change for UK |
Annual tax charge of 200% of council tax. Gains on sale taxed at income tax rates with £1,000 allowance. |
Annual tax charge 500% of council tax. |
Kay Ingram
Director of Public Policy, LEBC
Please remember, no news or research item is a recommendation or advice to buy. LEBC Group Ltd is not responsible for accuracy and may not share the author’s views. The contents of this blog are for information purposes only and do not constitute individual advice. All information is based on our current understanding of taxation legislation and regulations. The Financial Conduct Authority does not regulate estate planning, tax advice, wills or trusts.
[1] Income Tax rates apply to the UK except Scotland where setting tax rates is devolved.
[2] https://www.withersworldwide.com/en-gb/insight/liberal-democrat-and-snp-tax-policies-what-to-expect, accessed 26/11/2019
https://vote.conservatives.com/our-plan, accessed 26/11/2019
https://labour.org.uk/manifesto/ https://www.libdems.org.uk/plan, accessed 26/11/2019