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Over 65 allowances 2011-2012
Comments
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Yes it's a completely absurd situation
the special age related tax allowance ought to be abolished and so then there would be no 30% marginal tax rate
I can see no logic in a working person, maybe struggling to pay a mortage etc having a lower tax allowance than an over 65 person on what is not a bad income.
Couldn't agree more.
Expect, however, far more shroud waving of this type during the coming years as people finally realise that what they thought of as their entitlements for life aren't.It only takes one tree to make a thousand matches, it only takes one match to burn a thousand trees. As well, the cars are all passing me, bright lights are flashing me.
Johnny Was. Once.
Why did he think "systolic" ?0 -
It means that a wealthy pensioner pays the same tax rate as someone who has to actually go out to work for a living, I am not sure what is wrong with that?
Since when did 23% =30%?
Also if savings interest is included in £29k, this is then used as gross by HMRC and thus taxed twice.
Some of us also have a mortage.0 -
I know that some people assume that their tax allowance at 65 will be £9k+ and are not aware that this is wiped out if income exceeds £29k
But at least it will be 'wiped out' now to £7475 ...... instead of to £6475? So that's a fairly significant improvement?
And bearing in mind the age related allowances were both increased by close to £1100 over indexation (and compounded since) in 08-09. We're really only seeing some restoration of the differential in 2011-12.
If we do get to a basic £10k PA it probably is time to ditch the age related allowances and the needless complexity that goes with it.If you want to test the depth of the water .........don't use both feet !0 -
Since when did 23% =30%?
Also if savings interest is included in £29k, this is then used as gross by HMRC and thus taxed twice.
Some of us also have a mortage.
At 29k the extra allowances are removed to make pensioners = workers allowances, up to that point the pensioner is still better off than the worker. Savings interest is only used in the calculation to disallow the extra age allowance, it is not taxed twice.
BTW have you never heard of tax planning e.g. ISA's, Investment trusts NS&I tax free index linked for your unearned income?'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
Not many I will wager, and when you add on - No NI contributions, free bus passes, fuel payments, some pensioners are in a very tidy position.Some of us also have a mortgage'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
At 29k the extra allowances are removed to make pensioners = workers allowances, up to that point the pensioner is still better off than the worker. Savings interest is only used in the calculation to disallow the extra age allowance, it is not taxed twice.
BTW have you never heard of tax planning e.g. ISA's, Investment trusts NS&I tax free index linked for your unearned income?
Still do not agree with the logic that a £29k pensioner pays a higher rate of marginal tax than the one on £22k.
Tax Planning is fine, but should not be necessary to correct the failures of our tax system.
BTW: I hardly think bus passes & winter fuel payments justifies a 30% marginal tax either...THE NUMBER is how much you need to live comfortably: very IMPORTANT as part 1 of Retirement Planning. (Average response to my thread is £26k pa)0 -
Thanks for all your responses.0
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Still do not agree with the logic that a £29k pensioner pays a higher rate of marginal tax than the one on £22k.
Tax Planning is fine, but should not be necessary to correct the failures of our tax system.
BTW: I hardly think bus passes & winter fuel payments justifies a 30% marginal tax either...
The extra tax on the £4930 is £493 the rest would have been payable anyway at the 20% tax band.
Bus passes/winter fuel payments and the other freebies can be worth far more than £493.0 -
Still do not agree with the logic that a £29k pensioner pays a higher rate of marginal tax than the one on £22k.
Tax Planning is fine, but should not be necessary to correct the failures of our tax system.
BTW: I hardly think bus passes & winter fuel payments justifies a 30% marginal tax either...
Why, where did I write that? as far as I can see the marginal rate would be identical.'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
Definately not a new situation it has gone on now for at least 4 years.
The Pensioners Alliance has taken this up with MPs but their response was that it was just one of the many querks of our PAYE system.
Personally I think they just did not understand what it was about!!:)
This has nothing to do with PAYE, in fact, it is so far removed that it can only be dealt with under SA. This, of course, adds another cost onto the increased costs borne by pensioners.The only thing that is constant is change.0
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