Scottish Public Finance Minister Kate Forbes announced the draft Budget for 2020/21 on 6 February 2020.
Scottish Income Tax has applied since April 2016 and is payable by Scottish taxpayers on non-savings income only. This followed the 2015 introduction of Land and Buildings Transaction Tax (LBTT) which replaced Stamp Duty Land tax in Scotland.
Income Tax
From 6 April 2020
- No changes to Income Tax rates or to the basic personal allowance.
- Scottish taxpayers continue to be eligible for the UK personal allowance. The 2020/21 personal allowance remains unchanged as confirmed in the 2020 Budget.
- Changes were proposed to Income Tax bands in line with inflation, however the higher rate threshold was frozen.
The proposed new bands are:
2020/21
|
Rate |
% |
Band of income £ |
|
Personal allowance (tax -free band) |
0 |
Up to 12,500 |
|
Starter rate |
19 |
12,500-14,585 |
|
Basic rate |
20 |
14,586-25,158 |
|
Intermediate rate |
21 |
25,159-43,430 |
|
Higher rate |
41 |
43,430-150,000 |
|
Additional rate |
46 |
150,000+ |
Land and buildings transaction tax (LBTT)
Non-residential leases:
A new 2% band for leases on non-residential property, where the net present value (NPV) of the rental income over the period of the lease exceeds £2m.
- Currently, there is one rate of 1% which applies where the NPV is over £150,000.
- The change took effect from 7 February 2020 but will not apply where the contract for the transaction was entered into before 6 February 2020.
Links to our guides
Land and Buildings Transaction Tax (LBTT)
Land and Buildings Transaction Tax (LBTT) is a tax on transactions in land situated in Scotland. It replaced Stamp Duty Land Tax (SDLT) on 1 April 2015.
Scottish Income tax: Am I a Scottish taxpayer?
Who does the Scottish Income Tax apply to? Am I resident in Scotland? What constitutes a residence and the 'main' residence?
External links
