Tax-Free Allowance UK: Complete Guide to All Tax-Free Amounts in 2025/2026

The UK tax system offers several tax-free allowances that can reduce the amount of tax you pay. Understanding these allowances can help you optimise your finances and keep more of your money. Here's a complete guide to tax-free allowances for 2024/2025.

Personal Allowance

The Personal Allowance is the most important tax-free amount. For 2024/2025, it's £12,570. This is the amount you can earn before paying any income tax. It tapers by £1 for every £2 earned over £100,000, as explained in our guide to the 60% tax trap.

Marriage Allowance

If you're married or in a civil partnership and one partner earns less than the Personal Allowance (£12,570), you can transfer up to £1,260 of their unused Personal Allowance to the higher-earning partner. This can save the higher earner up to £252 in tax per year.

Blind Person's Allowance

If you're registered blind or severely sight-impaired, you're entitled to an additional tax-free allowance of £2,870 on top of your Personal Allowance. This can save you up to £574 in tax at the basic rate.

Personal Savings Allowance

Basic rate taxpayers can earn up to £1,000 in savings interest tax-free. Higher rate taxpayers get £500. Additional rate taxpayers get £0 savings allowance.

Dividend Allowance

In the 2024/2025 tax year, you can earn up to £1,000 in dividend income tax-free. Above this, dividends are taxed at 8.75% (basic rate), 33.75% (higher rate), or 39.35% (additional rate).

Capital Gains Tax Allowance

For 2024/2025, the Capital Gains Tax annual exempt amount is £3,000. This is the profit you can make from selling assets before CGT applies.

ISA Allowance

You can save or invest up to £20,000 per year in an ISA completely tax-free. This includes Cash ISAs, Stocks and Shares ISAs, and Innovative Finance ISAs. A Lifetime ISA allows you to save up to £4,000 (within the £20,000 limit) with a 25% government bonus.

Trading Allowance

If you have small trading or casual income (e.g., from selling on eBay, freelancing, or odd jobs), you can earn up to £1,000 tax-free under the trading allowance.

Use our salary calculator to see how the Personal Allowance affects your take-home pay.