INCOME TAX ALLOWANCES

2009/2010

2010/2011

£

£

Personal allowance (1)

6,475

6,475

Income limit for Personal Allowance

N/A

100,000

Personal Allowance for people aged 65–74 (1)(2)

9,490

9,490

Personal Allowance for people aged 75 and over (1)(2)

9,640

9,640

Married Couple's Allowance – aged 75 and over (2)(3)

6,965

6,965

Income limit for age-related allowances

22,900

22,900

Minimum amount of Married Couple's Allowance

2,670

2,670

Blind Person's Allowance

1,890

1,890

INCOME TAX RATES AND TAXABLE BANDS

2009/2010

2010/2011

£

£

Starting rate for savings: 10%*

0-2,440

0-2,440

Basic rate: 20%

0-37,400

0-37,400

Higher rate: 40%

Over 37,400

37,401-150,000

Additional rate: 50%

N/A

Over 150,000

INHERITANCE TAX THRESHOLDS

2009/2010

2010/2011

Nil rate band

£325,000

£325,000

(1) From the 2010–11 tax year the Personal Allowance reduces where the income is above £100,000 – by £1 for every £2 of income above the £100,000 limit. This reduction applies irrespective of age.

(2) These allowances reduce where the income is above the income limit – by £1 for every £2 of income above the limit. For the 2008/09 and 2009/10 tax years they will never be less than the basic Personal Allowance or minimum amount of Married Couple's Allowance. However, from the 2010–11 tax year the Personal Allowance for people aged 65 to 74 and 75 and over can be reduced below the basic Personal Allowance where the income is above £100,000.

(3) Tax relief for the Married Couple's Allowance is given at the rate of 10 per cent.

* From 2008/09 there is a 10 per cent starting rate for savings income only. If non-savings income is above this limit then the 10 per cent starting rate for savings will not apply.

The dividend rate for the 2009/10 tax year is the 10 per cent ordinary rate and the 32.5 per cent dividend upper rate. For the 2010/11 tax year, in addition to these rates, there is a new dividend additional rate of 42.5 per cent.