FSRE 1
UK Taxes Cheat Sheet
Income tax, NI, CGT, IHT, SDLT, corporation tax, ISAs and property tax essentials.
Income Tax
Tax paid on earnings:
- Salary
- Self-employment income
- Rental income
- Savings interest
2026 Personal Allowance
- Most people can earn £12,570 tax free
Income Tax Bands
| Band | Rate |
|---|---|
| Basic Rate | 20% |
| Higher Rate | 40% |
| Additional Rate | 45% |
Scotland
- Different income tax bands may apply
National Insurance (NI)
Paid by
- Employees
- Employers
- Self-employed
Used to fund
- State pension
- NHS
- Benefits
Important for Mortgage Advisers
- Lenders use gross income, net income and NI deductions during affordability assessments
Main Types of NI Contributions
| Class | Who Pays It | Purpose |
|---|---|---|
| Class 1 | Employees & employers | Earnings from employment |
| Class 2 | Self-employed | Flat weekly contribution |
| Class 4 | Self-employed | Percentage of profits |
| Class 1A | Employers | Benefits in kind (company car etc.) |
| Class 1B | Employers | PAYE settlement agreements |
Capital Gains Tax (CGT)
Tax on profit when selling assets such as:
- Shares
- Investments
- Second homes
Main Home Exemption
- Usually no CGT on primary residence
Buy-to-Let Property
- CGT may apply on sale profits
Inheritance Tax (IHT)
Charged on estate after death.
Standard Nil Rate Band
- £325,000
- Above threshold: 40% tax usually applies
Residence Nil Rate Band
- Extra allowance may apply when passing family home to children
Stamp Duty Land Tax (SDLT)
Tax paid when buying property in England & Northern Ireland.
| Portion of Property Price | Rate |
|---|---|
| Lower bands | 0% |
| Middle bands | 5% |
| Higher bands | 10–12% |
First-Time Buyers
- May receive relief
Additional Properties
- Usually +3% surcharge
- Applies to buy-to-let and second homes
Corporation Tax
Paid by limited companies on profits.
Important for
- Limited company landlords
- SPVs (Special Purpose Vehicles)
Savings & Investment Taxes
ISA (Individual Savings Account)
- Tax-free savings/investments
- No tax on interest
- No tax on dividends
- No tax on capital gains
Property Taxes (CeMAP Hot Topic)
Buy-to-Let — consider
- Income tax on rent
- CGT on sale
- SDLT surcharge
Limited Company BTL
- Corporation tax may apply instead of income tax
Tax-Efficient Products
| Product | Tax Benefit |
|---|---|
| ISA | Tax-free growth |
| Pension | Tax relief |
| Junior ISA | Tax-free child savings |
HMRC
Main UK tax authority: HM Revenue & Customs.
Responsible for
- Collecting taxes
- Tax enforcement
- Compliance