Every key way to build wealth in the UK

A director taking profit from their own company chooses how much arrives as salary and how much as dividends. Salary is deductible against corporation tax and carries both National Insurances; dividends are paid from taxed profit and carry none. The split that leaves the most is a single arithmetic answer, and it moved this year because dividend rates did.

Where this stops. It assumes the company is profitable and the director is the only employee. It does not model a spouse on the payroll, other shareholders, or any benefit in kind.

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An annual reduction in an employer's National Insurance bill. A company whose only employee is a single director cannot claim it, which is the shape many owner-managed businesses take.

Where this stops. Eligibility depends on the makeup of the payroll and on connected companies. Whether a particular company qualifies is a separate question.

When the company pays the contribution directly, it is deductible against corporation tax, skips employer and employee National Insurance, and does not count as the director's income. That last point is why it feeds into the income thresholds in Keep.

Where this stops. Contributions must be wholly and exclusively for the purposes of the trade. The annual allowance still applies, and it tapers at higher incomes.

A band of dividend income taxed at nothing before the dividend rates begin. It has been cut repeatedly and is now small enough that most people who receive dividends pass it in the first month of the tax year.

Where this stops. It applies to dividend income only. It does not reduce adjusted net income for the taper or childcare tests.

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Corporation tax is not one rate. Between the small profits limit and the main rate limit, marginal relief produces an effective rate higher than either, so a pound of profit inside that band costs more than a pound above it.

Where this stops. Associated companies divide the limits between them, which this does not model.

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A reduced rate of capital gains tax on qualifying disposals of a business, subject to a lifetime limit. The rate has risen twice in recent years, so any exit calculation built on an older figure now understates the bill.

Where this stops. Qualifying conditions cover shareholding, employment and holding period, and they are strict. Whether a particular disposal qualifies is a question for an accountant.

Registration becomes compulsory once taxable turnover in any rolling twelve months passes the threshold. HMRC looks at a rolling year, so annual accounts alone can miss the trigger.

Where this stops. This is the compulsory threshold. Voluntary registration below it can be advantageous or costly depending on who the customers are, and that is not covered here.

Small non-cash benefits an employer can provide with no tax, no National Insurance and no reporting. Directors of close companies have an annual cap that other employees do not.

Where this stops. All four conditions must hold at once. If one fails, the whole benefit is taxed, not just the part over the limit.

Splitting income between two people can use two personal allowances and two basic-rate bands. It is common in owner-managed companies and often done without the paperwork HMRC expects.

Where this stops. Whether a share class or a salary is genuine and commercially justified determines whether it stands up. Settlements legislation applies, and this is firmly accountant territory.

A sole trader pays a different National Insurance structure from an employee, with its own thresholds and its own relationship to the State Pension record.

Where this stops. This does not cover whether trading as a sole trader or through a company leaves more, which depends on profit level and on what the money is for.

Self Assessment collects tax for the year ahead in two instalments, each sized on the year just gone. A first return can therefore ask for eighteen months of tax at once, and a good year is followed by payments sized for it whether or not the next year matches.

Where this stops. Whether a reduction claim is appropriate depends on expected income, and claiming too low carries interest.

The personal allowance is withdrawn across a band above a round number, producing an effective marginal rate far above the headline one. A pension contribution reduces adjusted net income, which is the figure the withdrawal is tested on, so it can move income back below the line and recover the allowance.

Where this stops. The annual allowance caps it, and that allowance itself tapers at higher incomes. Money in a pension is not reachable until the minimum access age.

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Both childcare schemes stop in full at the same round number, with no taper, and the test is applied to each parent separately. Because the threshold is adjusted net income, the contribution that recovers the personal allowance can restore the childcare in the same move, which is the single largest interaction on this site.

Where this stops. The free hours are England only. Scotland, Wales and Northern Ireland run different schemes, and this does not model them.

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Giving up contractual cash pay in return for a non-cash benefit reduces the pay that tax and National Insurance are charged on. Unlike relief claimed on a contribution made from net pay, it saves employee National Insurance as well as income tax, and it reduces the employer's bill too.

Where this stops. Cash pay cannot fall below the National Minimum Wage. The arrangement needs a contractual change, not just a payroll tweak, and lower pay can affect mortgages and some benefits.

A Gift Aid donation lets the charity reclaim basic rate tax, and lets a higher rate taxpayer reclaim the difference. Less well known is the second effect: the grossed-up donation reduces adjusted net income, which is the figure the taper and the childcare threshold are both tested on.

Where this stops. The donor must have paid at least as much tax as the charity reclaims. The reclaim is through Self Assessment or a tax code change and does not happen on its own.

Where one spouse or civil partner earns below the personal allowance and the other is a basic rate taxpayer, part of the unused allowance can be transferred. It can be backdated across several closed tax years.

Where this stops. It disappears entirely once the higher earner pays higher rate tax; it does not taper. It is also not the same thing as the Married Couple's Allowance, which applies to much older couples.

Child Benefit is clawed back through the tax return of the higher earner in the household once their income passes a threshold, and is fully withdrawn by a second one. The charge falls on one person's income even though the benefit is paid to the household.

Where this stops. Registering for Child Benefit protects a National Insurance record even where the payment is declined, and that is a separate decision from the charge.

Repayment is a share of income above a plan-specific threshold, and it stacks on top of income tax and National Insurance. For anyone repaying, the real marginal rate on a pay rise is higher than any published tax band shows.

Where this stops. On this site, student loans are modelled as a share of future income and are excluded from net worth. Plans differ, and more than one can run at once.

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Bonuses commonly land between December and March, which is also when a household's income for the year becomes final. A bonus that carries income across the taper or the childcare line costs far more than its own marginal rate, and the decision about where it goes is usually available before it is paid.

Where this stops. Whether a bonus can be sacrificed or deferred depends on the employer's scheme rules and on the timing of the contractual entitlement.

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Most personal finance writing assumes a buffer of essential spending in cash you can reach without selling investments or paying penalties. No statute sets the number of months; it is a widely used rule of thumb, included here because it shapes how people talk about order of operations.

Where this stops. There is no sourced figure for how many months. This describes the convention and where it comes from, and nothing more.

When debt costs more than you assume investments will return, paying the debt off earns the interest rate with certainty. Most guides put that ahead of investing; it is dull, which is partly why it gets skipped.

Where this stops. No return assumption on this site is a forecast, so the comparison depends on an assumption the reader sets. It also says nothing about mortgages, where the rate is usually lower and the term far longer.

A band of savings interest taxed at nothing, which shrinks as income rises and vanishes altogether at the additional rate. Rates on cash have been high enough recently that ordinary balances now generate taxable interest for the first time in years.

Where this stops. It applies to interest, not to dividends, and it is not an allowance that can be transferred or carried forward.

A further band of savings interest taxed at nothing, available only where other income is low. It is reduced pound for pound by non-savings income, which is why it matters most to people with a small salary and larger savings, including many company directors.

Where this stops. It works alongside the Personal Savings Allowance. The two interact, and the combination is easy to misread.

Insurance against long-term illness, death, or losing an earner. Any map of building wealth has to leave room for protection, because illness and bereavement interrupt plans more often than a poor fund choice.

Where this stops. Advising on or arranging protection is a regulated activity for authorised firms. Swealth is not authorised and does not cover it. It is listed so the gap is explicit.

A yearly amount that can be paid into ISAs, inside which there is no tax on interest, dividends or gains. It runs per tax year and does not carry over: whatever is unused on the fifth of April stops existing, and a fresh allowance starts the next day.

Where this stops. The allowance is shared across every ISA you hold. Unused room is optional headroom, not a bill.

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An ISA that attracts a government bonus on contributions, for a first home or for retirement. The withdrawal charge for any other purpose is set at a level that can return less than was paid in, which is the part that surprises people.

Where this stops. Age limits apply to opening and to contributing, and there is a property price cap for the first-home use. It counts within the overall ISA allowance.

A separate allowance per child, on top of an adult's own ISA. At eighteen the money belongs to the child and parents cannot take it back. That is how the product is built.

Where this stops. It cannot be accessed by the parent, and control passes at eighteen regardless of circumstances at the time.

The amount that can go into pensions each year with tax relief. It is the largest single allowance most people have, and it is also the one that reduces adjusted net income, which is why it appears in the Keep subject as well.

Where this stops. Relief is also limited by earnings in the year. Money in a pension is not reachable until the minimum access age.

Allowance unused in the previous three tax years can be added to this year's, which is what makes a single large contribution possible after a good year. It is the only allowance on this map with meaningful carry-forward.

Where this stops. Earnings in the year still cap the relief, membership of a scheme in the earlier years is required, and it cannot be used against the money purchase annual allowance.

The annual allowance reduces where both threshold income and adjusted income pass their limits, down to a floor. It affects exactly the people for whom a pension contribution is otherwise the most powerful lever available.

Where this stops. Threshold income and adjusted income are two different calculations, and both have to be worked out before the taper can be. The limits differ for earlier tax years.

Once a defined contribution pension has been flexibly accessed, the amount that can go back in falls sharply and permanently. Taking a small amount early can therefore close off a much larger contribution later.

Where this stops. Carry-forward cannot be used against it, and it cannot itself be carried forward. What counts as flexible access is narrower than it sounds and is worth checking before any withdrawal.

Many workplace schemes increase the employer's contribution when the employee's rises, up to a stated limit. Where a match is available and unused, the contribution rate is the only variable that changes what the employer pays in.

Where this stops. Match terms are set by the employer and vary widely. This states that the mechanism exists, not what any particular scheme offers.

A band of gains taxed at nothing each tax year. It has been cut sharply in recent years. It applies when you realise a gain, not to paper profits, and it does not carry over.

Where this stops. It applies per person and per tax year. Losses and the order of disposals affect the calculation, and this does not model either.

Selling a holding outside a wrapper and repurchasing it inside one realises a gain at that moment, which may fall within the annual exempt amount, and leaves the holding sheltered from then on. The repurchase uses ISA allowance.

Where this stops. There is time out of the market between the two trades, dealing costs apply, and the same-day and thirty-day matching rules govern what the gain actually is.

Assets pass between spouses and civil partners with no capital gains tax on the transfer, which puts the eventual gain in the hands of whichever of them has allowance or a lower rate available. It effectively doubles the annual exempt amount across a couple.

Where this stops. Not available if the couple separated and did not live together at all in the tax year, or for trading stock. The gain is deferred: the recipient inherits the original cost base.

Hitting a round number in cash and hitting the same goal in today's money can be decades apart at ordinary contribution levels. Many calculators show only the cash date; ours shows both.

Where this stops. Growth and inflation are assumptions the reader sets, not forecasts, and no figure here accounts for anybody's tax position.

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The full new State Pension requires a number of qualifying years of National Insurance. A director on a very low salary, or somebody with gaps from time abroad or out of work, can reach retirement with fewer than they assumed, and gaps can sometimes be filled for earlier years.

Where this stops. The qualifying year count applies to records starting after the new system began; anybody contracted out before it typically needs more. Whether filling a gap is worthwhile depends on the individual record.

Stamp duty is charged in slices, so only the part of the price above each threshold pays the higher rate. Reliefs and surcharges below break that smooth pattern and jump in steps.

Where this stops. England and Northern Ireland only. Scotland and Wales charge their own taxes with different thresholds.

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A higher starting threshold for a first purchase. Above a price ceiling the relief vanishes in full: one pound over costs the entire relief, one of the sharpest steps in the system.

Where this stops. Every buyer must be a first-time buyer for the relief to apply, including worldwide ownership history.

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A surcharge when a purchase leaves you owning more than one dwelling. It applies to the full price, not just the slice above a threshold, including when you have not yet sold a previous home.

Where this stops. A refund can be available where a previous main residence is sold within a time limit. Whether a particular purchase counts is fact-specific.

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An extra surcharge for buyers who do not meet a residence test. It stacks on the additional-property surcharge, which overseas buyers often overlook.

Where this stops. The residence test is its own definition and is not the same as tax residence for income purposes.

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Income from letting furnished accommodation inside your own home up to a threshold, with no tax and no return required. The threshold halves where the income is shared with somebody else.

Where this stops. The home must be one you live in, and it does not apply to a property divided into separate flats. Above the threshold a return is needed to claim it.

Mortgage interest on residential lettings is no longer deducted from rental income; you get a basic-rate tax reduction instead. Rental profit on paper is higher as a result, which can push you into other rules such as the income thresholds in Keep.

Where this stops. It applies to individuals letting residential property, not to companies or to furnished holiday lets under their own rules.

Selling your own home is free of capital gains tax where it has been your only main residence throughout. Several ordinary-sounding circumstances break that: letting part of it, using part exclusively for business, or grounds above a size limit.

Where this stops. A couple can have only one main residence between them at a time. Periods of absence have their own rules, which this does not cover.

Property is the largest component of household wealth in Britain and the one people state least precisely. The figure that belongs in a net worth calculation is the equity (value less the mortgage outstanding), and the cost of holding a property is not the same as the monthly payment.

Where this stops. This site does not forecast house prices and takes no view on whether to buy.

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The threshold below which an estate pays no inheritance tax, with a flat rate charged above it. It has been frozen for long enough that ordinary estates, particularly ones containing a house in the south, now pass it.

Where this stops. Estate planning depends on family circumstances and assets this site does not see. Treat this as background before speaking to a specialist.

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An additional threshold where a home passes to direct descendants. It is itself withdrawn above a large estate value, so it is worth least to the estates that owe most.

Where this stops. Direct descendants is a defined term and does not include every relative. Downsizing has its own provisions, not covered here.

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Where a spouse or civil partner dies without using their threshold, the unused part can be added to the survivor's. Together with the residence band this is the source of the widely quoted figure for a couple, which requires a home passing to children to reach.

Where this stops. It is not automatic; it has to be claimed by the personal representatives, with records from a death that may be decades earlier.

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An amount that can be given away each tax year and leaves the estate immediately, with no seven-year wait. Unused exemption carries forward, but only into the following year.

Where this stops. The limit is per giver, not per recipient, and it cannot be combined with the small gift exemption for the same person.

Separate exemptions for modest gifts to any number of people, and for gifts on a marriage or civil partnership, at amounts that depend on the relationship.

Where this stops. The small gift exemption cannot be used for somebody who has already received the annual exemption in the same year.

Regular gifts out of surplus income can leave the estate immediately with no seven-year clock and no cap. HMRC expects a pattern of payments, not a one-off, which is why it is powerful but rarely used.

Where this stops. Payments must come from income, not capital, and must leave the giver able to maintain their usual standard of living. Executors may need records years later to prove the pattern.

A gift outside the exemptions falls out of the estate after seven years. Taper relief reduces the tax on gifts made between three and seven years before death, and it reduces the tax, not the value of the gift, which is why it helps less than most people expect.

Where this stops. Taper relief only bites where the gift itself exceeds the nil-rate band. Gifts with a reserved benefit do not leave the estate at all.

An estate leaving a defined share of its net value to charity pays inheritance tax at a reduced rate on some assets. The charitable gift itself is also exempt, so both effects run together.

Where this stops. The share is measured against a defined net value, not the headline estate. The reduced rate applies to specific components, not the whole estate by default.

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Unused pension funds and death benefits will count in the estate for inheritance tax from a fixed future date. If you have been planning around pensions passing outside the estate, the maths changes from that point.

Where this stops. Death in service benefits and some defined benefit dependants' pensions are excluded. Personal representatives take over reporting and payment duties from scheme administrators.