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Over 65 personal allowance - any tips to increase it?
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panther
Posts: 126 Forumite
in Cutting tax
Having got the money saving bug (thanks to this excellent site) I've sorted out my parents savings and was now wondering if there's any way I can increase my dad's personal allowance?
He's a retired 70 y.o and misses out on the married couples allowance by just 2 years. He's been given tax code K40 for 08/09 as his taxable income for the year is worked out at £3423 and his works company pension is 3023 (a shortfall of £400 to be added). Both parents are disabled and receive the top rate of DLA care & mobility allowance and I thought I'd make some enquiries to see if there are any other allowances on offer to increase his personal allowance and bring down that K40. Thanks
He's a retired 70 y.o and misses out on the married couples allowance by just 2 years. He's been given tax code K40 for 08/09 as his taxable income for the year is worked out at £3423 and his works company pension is 3023 (a shortfall of £400 to be added). Both parents are disabled and receive the top rate of DLA care & mobility allowance and I thought I'd make some enquiries to see if there are any other allowances on offer to increase his personal allowance and bring down that K40. Thanks
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and bring down that K40.
You mean increase it? As that's a negative code of £400. His personal allowance should start out at £9030 (08-09) so there must be around £9430 of deductions in respect of untaxed pensions etc - resulting in the K40. Bear in mind the Chancellor increased the 65+ personal allowance quite considerably (by £1480) in this last Budget round. So 'increasing' his allowances can probably only be achieved by reducing his untaxed income! A bit self-defeating, as at least he will be getting 80p in every £1.
http://www.hmrc.gov.uk/rates/it.htmIf you want to test the depth of the water .........don't use both feet !0 -
Yes I meant increase. Last year (with personal allowance £7550) his tax code was K152. So they've adjusted it to reflect the increase in allowance. He paid a total of £732 tax for 07/08 and using the tax calculator I've worked out this coming tax year with K40 he will pay around £685. So about £47pa or 90p a week better off. I just wondered if there was any other allowances available that we don't know about that could increase his 9030 personal allowance. He doesn't pay a great deal tax but the more that stays in our pocket the better. I notice that the Isle of Man have a Disabled Person's allowance for anyone receiving DLA but unfortunetly we don't.
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If there are any deductions in his code for untaxed interest then he would be better putting more money in ISA's.
Also check what total estimated income his code is based on. The full 65+ personal allowance is means tested and if his total income goes above £21800 in 08/09 then he will not be entitled to all of the age allowance part of it, ie anything between £5435 and £9030.This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0
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