Income Tax UK: Tax Codes, Allowances, PAYE, Scottish Rates and Reliefs
Tax Allowances 2027/28 — Every UK Tax Allowance and Exemption in One Place
Every UK tax allowance for 2027/28 in one reference page. Personal allowance, ISA allowance, pension annual allowance, CGT exempt amount, dividend allowance, marriage allowance, savings allowance and more.
Every UK tax allowance for 2027/28 — your quick reference for the year ahead.
Last reviewed: May 2026. All figures reflect confirmed positions. Benefit-linked allowances (e.g. benefit rates) will be updated once the autumn 2026 uprating announcement is made.
Income Tax Allowances — 2027/28
| Allowance |
Amount |
Notes |
| Personal allowance |
£12,570 |
Frozen until Apr 2028; tapers from £100,000 |
| Marriage allowance |
£1,257 |
10% of personal allowance; basic rate taxpayers only |
| Blind person’s allowance |
£3,070 |
Added to personal allowance |
| Trading allowance |
£1,000 |
Self-employment income up to £1,000 tax-free |
| Property income allowance |
£1,000 |
Rental income up to £1,000 tax-free |
| Rent-a-room relief |
£7,500 |
Tax-free income from lodger in your main home |
Savings and Investment Allowances — 2027/28
| Allowance |
Amount |
Notes |
| ISA allowance |
£20,000 |
Per person per year; all ISA types combined |
| Junior ISA (JISA) allowance |
£9,000 |
Per child per year |
| Lifetime ISA limit |
£4,000 |
Counts within £20,000 total; max £1,000 bonus |
| Personal Savings Allowance (basic rate) |
£1,000 |
Interest tax-free |
| Personal Savings Allowance (higher rate) |
£500 |
Interest tax-free |
| Personal Savings Allowance (additional rate) |
£0 |
No allowance |
| Dividend allowance |
£500 |
Dividends tax-free; excess taxed at dividend rates |
| Starting rate for savings |
£5,000 at 0% |
Only if non-savings income is low |
Pension Allowances — 2027/28
| Allowance |
Amount |
Notes |
| Annual allowance |
£60,000 |
Or 100% of earnings if lower |
| Money Purchase Annual Allowance (MPAA) |
£10,000 |
Applies after flexible drawdown |
| Pension Commencement Lump Sum (tax-free) |
25% |
Capped at £268,275 lifetime |
Capital Gains Tax — 2027/28
| Allowance |
Amount |
Notes |
| Annual exempt amount |
£3,000 |
Per individual; net gains below this are tax-free |
| CGT rate — basic rate |
18% |
All asset classes post-Oct 2024 |
| CGT rate — higher/additional rate |
24% |
All asset classes post-Oct 2024 |
Inheritance Tax — 2027/28
| Allowance |
Amount |
Notes |
| Nil-rate band |
£325,000 |
Frozen until Apr 2030 |
| Residence Nil-Rate Band |
£175,000 |
Home to direct descendants; frozen until Apr 2030 |
| Potential combined threshold (couple) |
£1,000,000 |
Both NRB + RNRB transferred |
Gifting Exemptions — 2027/28
| Exemption |
Amount |
| Annual gift exemption |
£3,000 per person |
| Small gift exemption |
£250 per recipient |
| Wedding gift (to child) |
£5,000 |
| Wedding gift (to grandchild) |
£2,500 |
| Wedding gift (to other) |
£1,000 |
| Normal expenditure out of income |
Unlimited (with conditions) |
Business Tax Allowances — 2027/28
| Allowance |
Amount |
Notes |
| Annual Investment Allowance (AIA) |
£1,000,000 |
100% first-year deduction for plant and machinery |
| Corporation Tax — small profits rate |
19% |
Profits under £50,000 |
| Corporation Tax — main rate |
25% |
Profits over £250,000 |
| VAT registration threshold |
£90,000 |
Rolling 12-month turnover |
Key Changes for 2027/28
The main confirmed change affecting the 2027/28 allowances is the inclusion of pension funds in the IHT estate from April 2027 — this fundamentally alters inheritance tax planning and the interaction with pension allowances:
- Previously, defined contribution pension funds passed outside the estate free of IHT
- From April 2027, unused DC pension balances will be included in the estate and subject to 40% IHT above the nil-rate band
- This makes the IHT nil-rate band (£325,000) and residence nil-rate band (£175,000 where applicable) more important for pension holders
- The pension annual allowance (£60,000) and the interaction with IHT is now a key financial planning consideration
Other allowances — income tax personal allowance (£12,570), dividend allowance (£500), CGT annual exempt amount (£3,000), ISA allowance (£20,000) — remain unchanged and are frozen until April 2028 under current policy.
For a full tax planning overview using these allowances, see the Tax Planning hub.
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