My latest tax newsletter has some information about the Scottish rate of income tax which will be able to be applied from 6 April 2016.

The Scottish main rates will be calculated by reducing the UK basic, higher and additional rates by 10p and adding to each the Scottish rate.

Using the example given which are the rates at present, say the Scottish rate was 12% that would mean that the current rates of 20%, 40% and 45% would be 22%, 42%, and 47%. If the Scottish rate was 9.5%, then the rates would be 19.5%, 39.5% and 44.5% in Scotland.

You are a Scottish taxpayer if you are UK resident in a tax year and meet any one of the following conditions. A close connetion based on where your place of residence is, and you live there for part of the year. It's more complicated where you have more than one residence around the UK and it's too complicated to go into details here.

Condition  A is where you have a close connection with Scotland, ie you live there.

Condition B is where you don't have a close connection with England, Wales or N Ireland and you spend more days in a tax year in Scotland then the days spent in each of England, Wales, or N Ireland.

Condition C is where you have an MP for a constiuency in Scotland, or an MEP for Scotland, or an MSP.

The Scottish rates apply to employment income, self employment income, certain payments out of various trusts (get advice if this is of any relevance to you), and other non-savings income.

The Scottish rates do not apply to dividend and savings income, CIS deductions, and obscurer types of income (annual remittance basis charge on non-UK domiciled individuals, non-resident landlord scheme deductions, payments to foreign entertainers and sportsmen and income from deceased estates and onshore interest in possession trusts).

Reliefs will apply at the Scottish or UK rates for:

gift aid higher/additional rate relief

payroll giving scheme

donations of land/shares to charity

pension scheme net pay arrangements

retirement annuity releif

personal pension contributions relieved at source

PAYE settlement arrangements

taxed incentive award schemes

self assessed income of non-xorporate CIS sub contractors

Reliefs/charges will continue to be at the UK rates for:

gift aid repyament to charities

annial/lifetime allowance charges

basic rate tax on non-savings income paid through an IIP trust or decesased estate.