In light of the upcoming changes to Scottish Income Tax rates and bands, HMRC has released guidance to ensure that tax reliefs continue to work as they were intended.
The guidance focuses on five tax reliefs: Marriage Allowance, Gift Aid, pensions relief at source, social security pension lump sum and finance cost relief.
Marriage Allowance: all those claiming Marriage Allowance in Scotland can continue to do so at the current rate (20 per cent). Gift Aid: changes will be made to ensure that Scottish taxpayers can benefit from the right rate of tax relief on Gift Aid. Gift Aid will continue to be paid to charities at the basic rate, with Scottish taxpayers able to claim the correct amount of additional relief on top of this. Pensions relief at source: current processes will continue while the government works with stakeholders to establish how this will work in the longer term. For 2018 to 2019, Scottish taxpayers who receive relief on their contributions at source will continue to receive relief in their pension pot at 20 per cent. Social security pension lump sum: changes will be made so that Scottish taxpayers who receive a social security pension lump sum will be taxed, where appropriate, at the new Scottish starter rate. Finance cost relief: will continue to apply at 20 per cent, the same rate applicable to landlords across the UK.