Skip to content

ACCA Strategic Professional · Advanced Taxation (UK) · Income tax: property and investment income

Priya is a higher rate taxpayer who receives bank interest and UK company dividends. Under the rates and allowances for ATX-UK (Finance Act 2025), which pair of nil rate bands applies to her?

A higher rate taxpayer has a £500 savings income nil rate band and a £500 dividend nil rate band. The £1,000 savings band is available only to basic rate taxpayers, and the dividend nil rate band is a flat £500.

  1. ASavings income nil rate band £1,000; dividend nil rate band £500
  2. BSavings income nil rate band £500; dividend nil rate band £500Correct
  3. CSavings income nil rate band £500; dividend nil rate band £1,000
  4. DSavings income nil rate band £0; dividend nil rate band £500

Explanation

The savings income nil rate band is £1,000 for basic rate taxpayers and £500 for higher rate taxpayers. The dividend nil rate band is £500. Priya therefore has £500 for each type of income. The £1,000 savings figure applies only to basic rate taxpayers.

Did you get it right without looking?

One question tells you little. A timed set on Income tax: property and investment income shows your real accuracy, how long you take and where you lose marks.

Practise Income tax: property and investment incomeFree diagnostic mock

More Income tax: property and investment income questions