UK Tax-Free Allowances 2026/27
Every UK tax-free allowance for 2026/27 — Personal, Marriage, Blind Person's, Dividend, Personal Savings, Starting Rate for Savings, Trading, Property and ISA.
HMRC publishes over a dozen tax-free allowances and reliefs that can reduce what you actually owe. Most people use only the Personal Allowance and maybe an ISA — but missing out on the others is quietly costing some taxpayers hundreds or thousands a year. This is the complete list for 2026/27.
Income Tax allowances
Personal Allowance — £12,570
The main tax-free amount on your earnings, pension, and most other income. Frozen at this level through to at least April 2028 under the Autumn Statement 2022 policy.
Taper: reduces by £1 for every £2 of income above £100,000, reaching zero at £125,140. If your income is £120,000 your effective PA is £10,000; at £130,000 you have zero PA, so everything from £0 upwards is taxable.
Applies to Scottish taxpayers too — the PA is UK-wide, only the bands above differ.
Marriage Allowance — £1,260 transfer
Married or in a civil partnership? The lower earner (income ≤ £12,570) can transfer £1,260 of their PA to the higher earner (basic-rate taxpayer, income £12,571-£50,270). Saves the household up to £252/year.
Full walk-through: Marriage Allowance 2026/27.
Blind Person’s Allowance — £3,250
Added to your PA if you’re registered blind / severely sight-impaired (England/Wales) or certified by an eye specialist (Scotland/NI) — or unable to do work for which eyesight is essential.
2026/27 uprate: £3,130 → £3,250 (+£120 from 2025/26).
Effective tax-free threshold for claimants: £12,570 + £3,250 = £15,820. Transferable to spouse/civil partner if unused.
Married Couple’s Allowance — for people born before 6 April 1935
A legacy allowance for older couples where at least one partner was born before 6 April 1935. It’s a tax reduction, not a deduction from income: currently up to £1,143 off your tax bill (2025/26 figure — 2026/27 expected to uprate slightly; check gov.uk for the current amount).
Cannot be claimed alongside Marriage Allowance. HMRC applies whichever gives the couple the bigger benefit.
Savings and investment allowances
Personal Savings Allowance (PSA)
Tax-free interest on savings, in addition to your PA:
- Basic-rate taxpayer: £1,000 of interest tax-free
- Higher-rate taxpayer: £500 of interest tax-free
- Additional-rate taxpayer: £0
Applies to interest from banks, building societies, Peer-to-Peer loans, credit unions, and non-ISA savings. Gilt and corporate bond interest is counted.
Banks now report interest to HMRC automatically. If your non-ISA interest exceeds the PSA, HMRC will typically collect the tax by adjusting your PAYE tax code rather than making you file self-assessment.
Starting Rate for Savings — up to £5,000
If your non-savings income is less than £17,570, you pay 0% tax on savings interest up to £5,000 (reducing £1-for-£1 as non-savings income rises above £12,570).
Formula: Starting Rate band = £5,000 − max(0, non-savings income − £12,570).
Example: pensioner with £14,000 state pension and £6,000 interest:
- Non-savings income above PA: £14,000 − £12,570 = £1,430
- Starting Rate band: £5,000 − £1,430 = £3,570
- First £3,570 of interest: 0%
- Next £1,000 via PSA (basic-rate): 0%
- Remaining £1,430 of interest: 20% = £286
Dividend Allowance — £500
First £500 of dividend income tax-free. Above that, dividend tax rates apply:
- Basic rate: 8.75%
- Higher rate: 33.75%
- Additional rate: 39.35%
Frozen at £500 since 2024/25 (reduced from £1,000). Applies to dividends from UK companies — your own limited company counted the same as public-share dividends.
Dividend calc walkthrough: dividend tax calculator.
ISA Allowance — £20,000
Not an “allowance” in the HMRC income-tax sense — it’s a savings/investment wrapper. Money inside an ISA grows tax-free (no Income Tax on interest, no tax on dividends, no CGT on gains).
2026/27 limit: £20,000 total across all ISA types per person:
- Cash ISA, Stocks & Shares ISA, Innovative Finance ISA, Lifetime ISA (£4,000 sub-limit inside the £20,000 main limit)
- Junior ISA separate: £9,000 for children
- Use it or lose it — unused allowance does NOT roll over to the following tax year
Self-employment and property allowances
Trading Allowance — £1,000
First £1,000 of gross trading income is tax-free and doesn’t require self-assessment. Covers hobby income, eBay/Etsy side hustles, tutoring, small freelance work.
Two choices above £1,000:
- Full expenses: register for self-assessment, deduct actual expenses from income, pay tax on the profit
- Partial relief: subtract the £1,000 allowance from gross, pay tax on the rest (no other expense claims)
Can’t combine both. Pick whichever gives the lower tax bill.
Property Allowance — £1,000
Same mechanic as Trading Allowance but for property/rental income. £1,000 gross rental tax-free; above that either claim actual expenses or the £1,000 allowance (no both).
Rent-a-Room Scheme — £7,500
Rent a room in your main residence tax-free up to £7,500/year (£3,750 if shared with a co-owner). Anyone renting a spare room to a lodger at £400/month (£4,800/year) pays zero tax on the income.
Must be a furnished room in your main home — not a separate flat or holiday let.
Capital Gains annual exempt amount — £3,000
First £3,000 of capital gains (from selling shares, a second home, crypto, etc.) is tax-free for 2026/27. Above that, CGT rates apply (10%/20% for most assets; 18%/24% for residential property).
Frozen at £3,000 since 2024/25 (reduced from £6,000 in 2023/24 and £12,300 in 2022/23).
Gift Aid — not an allowance but worth knowing
Donations to registered charities from a UK taxpayer can be declared “Gift Aid” — the charity claims an extra 25% from HMRC, and if you’re a higher/additional-rate taxpayer you can claim additional tax relief on your Self-Assessment.
- Basic-rate taxpayer: charity gets extra 25%, you get no personal tax relief
- Higher-rate taxpayer: you reclaim additional 25% of the gross donation
- Additional-rate taxpayer: you reclaim additional 31.25% of the gross donation
Gift Aid reduces your adjusted net income too — useful for HICBC mitigation.
Pension Annual Allowance — £60,000
The most you can contribute to a pension (across all schemes) per year and still get tax relief. Unused allowance from the previous 3 tax years can be carried forward.
Tapered for high earners: reduces by £1 for every £2 of adjusted income above £260,000, floor £10,000.
MPAA: £10,000 if you’ve already flexibly drawn DC pension.
State Pension — not a tax-free allowance
State Pension is taxable income. It’s paid gross, but HMRC adjusts your tax code to collect Income Tax via any PAYE you have. If State Pension exceeds your PA and you have no other PAYE, HMRC may issue a simple assessment at year-end.
Summary table
| Allowance | 2026/27 amount | Notes |
|---|---|---|
| Personal Allowance | £12,570 | Tapers above £100k |
| Marriage Allowance | £1,260 | Transferable — saves £252 |
| Blind Person’s Allowance | £3,250 | Added to PA |
| Dividend Allowance | £500 | |
| Personal Savings Allowance | £1,000 basic / £500 higher / £0 add. | |
| Starting Rate for Savings | £5,000 | Tapered by non-savings income |
| Trading Allowance | £1,000 | |
| Property Allowance | £1,000 | |
| Rent-a-Room | £7,500 | |
| ISA Allowance | £20,000 | Use-it-or-lose-it |
| Capital Gains exempt | £3,000 | |
| Pension Annual Allowance | £60,000 | Tapered for high earners |
| Gift Aid | 25% grossup |
Related
- Salary calculator — Personal Allowance + Marriage Allowance + Blind Person’s Allowance toggles all in one
- Dividend tax calculator — models the £500 allowance + rates
- HICBC explained — uses adjusted net income (gift aid + pension reduce)
- UK tax year changes 2026/27 — what’s moved vs 2025/26