Over 65 Income Tax Allowance

Milliemoo_2

I turned 65 in September 2009. During the tax year 2009/10 I received a proportion of the higher tax allowance of £9490 from my birthday until 5/4/10. I read that in the year one turns 65 you receive the whole of the allowance regardless of when your birthday is. Could anyone please confirm this before I contact HMR&C? TIA

CLAPTON

yes you potentially receive the whole of the age related allowance
however, what you actually get depends upon your total income as it starts to be whittled away once your income for the year reaches around 22k

how much did was your income for the year

Milliemoo_2

Thank you for that info. Sadly my income was well below that figure.

Mikeyorks

You'll need to post up the figures from the P2 (Coding Notice) if you want help.

HMRC don't do partial personal allowances ..... it's all or nothing. But the 'all' is then subject to clawback if your income exceeded £22900 (from all sources inc pension / interest).

Milliemoo_2

On reaching 65 I contacted HMR&C and completed a form listing all my receipts from various small annuities plus my state pension. I then received a wad of new coding notices. Thoroughly confused I decided to wait until after 5/4/10 and calculate my tax liability on an annual total. Believing I had overpaid based on a full year's allowance I wrote to HMR&C. Receiving no response I assumed I was wrong. My wife turned 65 recently and has received a full year's allowance. I didn't want to throw a spanner in the works if her allowance was wrong and my part allowance was correct, hence my asking the question on the forum. After the earlier reply I have written to HMR&C with details of my income viz:
Total gross income 11775
Personal allowance 9490 taxable 2285 @20% = 457.00
Tax paid per p60's 563.00
Overpaid 106.00
All my other income is from ISA's and therefore tax free.
Hope you agree with my calculations.

Mikeyorks

The form would be a P161 ..... which is a review of your income in the year you are potentially entitled to the age related allowance. They need the income as the age related allowances are subject to a reduction if your income exceeds a threshold.

From your calculation the full allowance was applicable. The only reason for a 'partial' allowance is if you completed the P161 (or they mis-interpreted it) incorrectly. As partial personal allowances don't exist outside this clawback.

The P2 I suggested you post the details of ...... would tell us if the allowance was restricted because of a belief you were exceeding the £22900 threshold? Do you have that detail (there are Notes on the P2 that are relevant)?

Otherwise - your calculation is correct. Unless ...... the £11775 includes any (non ISA) gross interest? As the 10% rate applicable to Savings interest would apply to anything in the band created by your Personal allowance + the 10% rate band (£9490 + £2440 = £11930)

Milliemoo_2

Thanks for your reply. I don't have any non-ISA interest-wish I did.