Welsh rates of income tax

The Income Tax (Pay As You Earn) (Amendment No 2) Regulations, 2018/1327, make consequential amendments to the PAYE regulations to provide for the new Welsh rate of income tax from April 2019. These amending regulations come into force on 1 January 2019.

Alongside the PAYE regulations, the draft Devolved Income Tax Rates (Consequential Amendments) Order 2018 makes consequential amendments to various pieces of tax legislation to ensure that the new Welsh rates of income tax are taken into account in relation to:

• the effect of late-payment interest on reliefs;
• pensions relief at source;
• pensions annual allowance charge;
• life insurance deficiency relief;
• residuary income of estates;
• annual payments from settlor-interested trusts;
• state pension lump sums;
• gift aid (for Welsh and Scottish taxpayers); and
• the transfer of assets abroad charge.

The amendments will have effect for 2019/20 and subsequent tax years.