Income Tax UK: Tax Codes, Allowances, PAYE, Scottish Rates and ReliefsTax 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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