In December 2017 the Scottish Government proposed a new Scottish Income Tax structure as part of the draft Scottish Budget. The Scottish Parliament approved this on 21 February 2018 and it will come into effect from 6 April 2018.
If your main residence is in Scotland and you have a Self-Invested Personal Pension with Alliance Trust Savings, the new Scottish Income Tax rates will be relevant for how we administer your SIPP Account. If your main residence is outside of Scotland, this will not affect you.
|Tax band||In Scotland||In the rest of the UK|
|Rate||If you earn||Rate||If you earn|
|Starter rate||19%||£11,851 to £13,850||n/a||n/a|
|Basic rate||20%||£13,851 to £24,000||20%||£11,851 to £46,350|
|Intermediate rate||21%||£24,001 to £43,430||n/a||n/a|
|Higher rate||41%||£43,431 to £150,000||40%||£46,351 to £150,000|
|Top rate||46%||£150,001 or more||45%||£150,001 or more|
The tax bands we’ve shown here assume you get the full tax-free personal allowance for Income Tax of £11,850. It is reduced by £1 for every £2 of income over £100,000.
If you are paying into your SIPP, following guidance from HMRC we will continue to claim basic rate tax relief of 20% on your behalf on your personal contributions. This tax relief is paid in to your SIPP.
Where you pay Income Tax at the Scottish starter rate of 19%, you will not be asked to repay the difference. There is no action you need to take.
Where you pay Income Tax at the Scottish intermediate, higher or top rates you can claim extra tax relief through your self-assessment tax return, if you submit one, or by contacting HMRC if you don’t. Tax relief claimed this way is not paid in to your SIPP. You’ll either get it through an adjustment to your tax code or through a tax rebate from HMRC. This is how it is currently administered for those paying tax at the higher and top rates.
If you are taking income from your SIPP we will continue to collect any Income Tax you are due from your income before we pay it out to you, based on your tax code.
From 6 April we will continue to do this at the new Scottish rates. Other than being aware that the new rates will apply, there is no action you need to take.
Broadly speaking, it’s where you would say you live.
If you live in the UK and:
You’re likely to be a Scottish taxpayer. If you are not sure whether HMRC view you as a Scottish taxpayer, check your tax code (which you’ll be able to find on a payslip or by contacting HMRC). If you are a Scottish taxpayer it will start with an ‘S’.
Only if you are:
This is your decision. We can’t give you personal advice. Any tax relief you get depends on your personal circumstances. To give you a rough idea of the amounts involved:
In all cases, the amount of extra tax relief you can get will be no more than the total amount of tax you actually pay at your highest marginal rate.MORE ON PENSION TAX RELIEF
You can reclaim it through your self-assessment tax return if you complete one (if you pay higher or top rate tax this is something you may already be doing). Otherwise, you should contact HMRC.
You’ll either get it through an adjustment to your tax code or through a tax rebate from HMRC. This is how it is currently administered for those paying tax at the higher and top rates.
Please contact HMRC and ask them to review your tax code. Following guidance from HMRC we can only make tax deductions from your income based on the tax code they have supplied to us.
We do not claim tax relief on or deduct income tax from any payments made in or out of these types of accounts, so they are not affected.
If you have questions or would like to speak with us, get in touch today.
Call: 01382 573737
Alliance Trust Savings Limited is a subsidiary of Alliance Trust PLC and is registered in Scotland No. SC 98767, registered office, PO Box 164, 8 West Marketgait, Dundee DD1 9YP; is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, firm reference number 116115. Alliance Trust Savings gives no financial or investment advice.