Series
Region
Select at least one series and one region to plot.
Rate bands
Assumptions & sources
- Each line assumes it is the only investment income you have. The savings line is drawn for someone whose interest sits on top of their other income and nothing else; the dividend line likewise. Real allowances interact — dividends push interest further up the band stack and can cost you the personal savings allowance — so holding several kinds at once is worse than reading two lines off this chart and adding them. The figures panel above is generated from the data for the selected tax year, so it is always in step with the chart.
- The order of the stack. Income tax charges non-savings income first, then savings, then dividends, and capital gains are settled after all of it. That ordering is what this whole tool is about: the same £1,000 of interest is free of tax for one person and taxed at 45% for another purely because of what sits underneath it.
- Savings: two nil-rate bands, both conditional. The starting rate for savings is a £5,000 band at 0%, but it is reduced pound for pound by non-savings income above the personal allowance, so it is gone entirely once other income reaches £17,570. The personal savings allowance is then £1,000 for a basic rate taxpayer, £500 for a higher rate taxpayer and nothing at all for an additional rate taxpayer. Both are nil-rate bands rather than deductions: they use up basic and higher rate band space as they go.
- The personal savings allowance is a genuine cliff edge. Because it halves the moment you become a higher rate taxpayer, one extra pound of interest can cost up to £100.40 in tax — the £500 of allowance withdrawn, taxed at 20%, plus 40p on the pound itself. Losing the last £500 on becoming an additional rate taxpayer is a second, smaller step. These are steps in the tax due, not rates, so no line can carry them: they are marked on the chart and drawn as vertical jumps in the tax view.
- Dividends get a £500 allowance, again a nil-rate band that uses up band space rather than a deduction, and it does not vary with your tax band. The rates then follow the band the dividend falls in. From 6 April 2026 the ordinary and upper rates each rose by two percentage points, to 10.75% and 35.75%; the additional rate was left at 39.35%.
- Savings rates have not moved yet. Interest is still taxed at the ordinary 20/40/45 rates in both years shown. The two percentage point rise announced for savings and property income takes effect from 6 April 2027, which is outside both tax years here.
- Capital gains are not income. They do not enter adjusted net income, so — unlike interest and dividends — a gain cannot taper away your personal allowance. They are still stacked on top of taxable income to find the rate: what is left of the basic rate band is charged at 18%, everything above at 24%. The £3,000 annual exempt amount is deducted first and, unlike the nil-rate bands above, it does not consume basic rate band.
- Business Asset Disposal Relief charges qualifying gains at a flat rate up to a £1m lifetime limit, and this chart assumes none of that limit has been used. The rate rose from 10% to 14% on 6 April 2025 and from 14% to 18% on 6 April 2026, so the two years shown sit either side of that second step. Investors' Relief carries the same rate and its own £1m lifetime limit. Whether a disposal qualifies at all is a question about the asset and the holding period, not about income, and is not modelled.
- Scotland sets none of these rates. The Scottish rates and bands apply only to non-savings, non-dividend income. Savings, dividends and capital gains are charged at UK rates using UK thresholds, and it is the UK basic rate limit that decides your personal savings allowance and how much of a gain is charged at 18%. So a Scottish taxpayer on £45,000 pays 42% at the margin on salary while still counting as a basic rate taxpayer for a capital gain.
- Where region does matter. Between £100,000 and £125,140 of income the personal allowance is withdrawn £1 for every £2, so an extra pound of interest or dividend also drags a further 50p of your other income into tax — at the Scottish rate if that is where you are taxed. An extra pound of dividend in that band costs 53.75% in the rest of the UK against 56.25% in Scotland in 2025/26. Outside that stretch the savings and dividend lines for the two regions are identical, and the chart draws one line labelled UK-wide rather than two on top of each other.
- The personal allowance is set against other income first, then savings, then dividends. It may in fact be allocated in whichever way is most beneficial, and for some mixes of income a different split saves a little tax; the conventional ordering is used here.
- The employment comparison line is income tax plus employee Class 1 National Insurance on the next pound of salary, on the same basis as the sibling take-home pay tool. It is there for scale, and it ignores whatever investment income the other lines assume — on the second horizontal axis it is a flat reference rather than a response to the gain.
- Tax due, and the effective rate, are the extra tax the interest, dividend or gain actually causes: the whole tax bill with it, less the bill without it. That is why the dividend line can show more than the headline rate above £100,000 — the allowance it strips away is part of the cost of having it.
- Excluded: ISAs and other wrappers (the entire point of which is to sidestep all of the above), pension contributions, gift aid, the remittance basis, trusts and personal representatives, non-residents, losses brought forward, share pooling and identification rules, the high income child benefit charge, and the withdrawal of tax-free childcare at £100,000. The sibling tool covers the last two against salary.
- Interest is assumed taxable and paid gross; dividends are assumed to be from UK companies with no foreign tax credit.