INCOME TAX ALLOWANCES

2011/2012

2012/2013

£

£

Personal allowance (1)

7,475

8,105

Income limit for Personal Allowance

100,000

100,000

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

9,940

10,500

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

10,090

10,660

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

7,295

7,705

Income limit for age-related allowances

24,000

25,400

Minimum amount of Married Couple's Allowance

2,800

2,960

Blind Person's Allowance

1,980

2,100

INCOME TAX RATES AND TAXABLE BANDS

2011/2012

2012/2013

£

£

Starting rate for savings: 10%*

0–2,560

0–2,710

Basic rate: 20%

0–35,000

0–34,370

Higher rate: 40%

35,001–150,000

34,371–150,000

Additional rate: 50%

Over 150,000

Over 150,000

* 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 is the 10 per cent ordinary rate and the 32.5 per cent dividend upper rate. In addition to these rates, there is a dividend additional rate of 42.5 per cent.

INHERITANCE TAX THRESHOLDS

2011/2012

2012/2013

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. 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.