INCOME TAX ALLOWANCES

2012/2013

2013/2014

£

£

Personal allowance (1)

8,105

N/A

Personal allowance for people born after 5 April 1948 (1)

N/A

9,440

Income limit for Personal Allowance

100,000

100,000

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

10,500

N/A

Personal Allowance for people born between 6 April 1938 and 5 April 1948 (1)(2)

N/A

10,500

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

10,660

N/A

Personal Allowance for people before 6 April 1938 (1)(2)

N/A

10,660

Maximum amount of Married Couple’s Allowance – aged 75 and over (2)(3)

7,705

7,915

Income limit for age-related allowances

25,400

N/A

Income limit for the allowances for those born before 6 April 1948

N/A

26,100

Minimum amount of Married Couple’s Allowance

2,960

3,040

Blind Person’s Allowance

2,100

2,160

INCOME TAX RATES AND TAXABLE BANDS

2012/2013

2013/2014

£

£

Starting rate for savings: 10%*

0—2,710

0—2,790

Basic rate: 20%

0—34,370

0—32,010

Higher rate: 40%

34,371—150,000

32,011—150,000

Additional rate: 50%

Over 150,000

—

Additional rate: 45%

—

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 37.5 per cent (2012/2013) 42.5 per cent.

INHERITANCE TAX THRESHOLDS

2012/2013

2013/2014

Nil rate band

£325,000

£325,000

(1) 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 or date of birth.

(2) These allowances reduce where the income is above the income limit, by £1 for every £2 of income above the limit. This applies until the level of the personal allowance for those aged under 65, or from 2013-14, for those born after 5 April 1948, is reached. For married couples allowance this applies until it reaches the minimum amount.

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