We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Age related personal allowance

Options
Am I correct in thinking that if x (female) turns 65 in Feb this year, she will get the increased PA for the whole tax year?
«134

Comments

  • No. This may be correct for "x" but it depends on their total taxable income. For some it will make no difference whatsoever, particularly with people working (and earning) later in life.


    Nearly everyone who lives in the UK gets a 'Personal Allowance' that lets them have some tax-free income each year. If you get a Personal Allowance this may increase in the tax year of your 65th birthday, depending on your taxable income.
  • adonis10
    adonis10 Posts: 1,810 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    No. This may be correct for "x" but it depends on their total taxable income. For some it will make no difference whatsoever, particularly with people working (and earning) later in life.


    Nearly everyone who lives in the UK gets a 'Personal Allowance' that lets them have some tax-free income each year. If you get a Personal Allowance this may increase in the tax year of your 65th birthday, depending on your taxable income.

    Yeah. Just did a bit of research. Ok, got some more info as follows:

    Pension 6480, bank interest 4400.

    I see that hmrc reduce the pa by £1 for every £2 over the age related allowance, which is 10.5k. So, with £10,880 of income that is 380 over the 10.5 age related allowance therefore I assume that it will be reduced by £190 (380/2) down to £10,310.

    Rough maths, but seems about right?
  • No. Total income would have to be about 25k before the age allowances starts to be reduced - I think you've got the age allowance confused with the income limit for the age allowance
  • adonis10
    adonis10 Posts: 1,810 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    No. Total income would have to be about 25k before the age allowances starts to be reduced - I think you've got the age allowance confused with the income limit for the age allowance

    Ah, ok.

    So, 10880 total income. 65 in Feb. How will the PA be calculated and does it apply to the whole year?
  • jem16
    jem16 Posts: 19,592 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    adonis10 wrote: »
    Ah, ok.

    So, 10880 total income. 65 in Feb. How will the PA be calculated

    With that income she will get the full £10,500 of personal allowance.
    and does it apply to the whole year?

    Yes it does.
  • xylophone
    xylophone Posts: 45,607 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    edited 9 February 2013 at 4:16PM
    She should make sure that her tax code is correct. Has she received a Notice of Coding?
    http://www.hmrc.gov.uk/pensioners/index.htm
    http://www.hmrc.gov.uk/rates/it.htm
  • zygurat789
    zygurat789 Posts: 4,263 Forumite
    Part of the Furniture Combo Breaker
    No. This may be correct for "x" but it depends on their total taxable income. For some it will make no difference whatsoever, particularly with people working (and earning) later in life.


    Nearly everyone who lives in the UK gets a 'Personal Allowance' that lets them have some tax-free income each year. If you get a Personal Allowance this may increase in the tax year of your 65th birthday, depending on your taxable income.

    For 2012/13 only. You will have to be 66 in 2013/14 to receive the age related personal allowance.
    The only thing that is constant is change.
  • System
    System Posts: 178,346 Community Admin
    10,000 Posts Photogenic Name Dropper
    The government are phasing age related allowances out and if you turn 65 during the 2013/2014 tax year you will not be getting a higher age related personal allowance at all.

    http://www.hmrc.gov.uk/rates/it.htm
    This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com
  • adonis10
    adonis10 Posts: 1,810 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Pam17 wrote: »
    The government are phasing age related allowances out and if you turn 65 during the 2013/2014 tax year you will not be getting a higher age related personal allowance at all.

    http://www.hmrc.gov.uk/rates/it.htm

    Thanks. However my question was about someone turning 65 in this tax year so any future issues are of no concern to me.
  • zygurat789
    zygurat789 Posts: 4,263 Forumite
    Part of the Furniture Combo Breaker
    adonis10 wrote: »
    Thanks. However my question was about someone turning 65 in this tax year so any future issues are of no concern to me.

    Well they should be because they are completely disappearing and costing pensioners £ms. How do you think they are paying for the (LibDem) pledge to increase the personal allowance to £10k?
    Pensioners as a group have suffered a greater reduction in income due to tax and other increases/decreases than any other group from this government and the previous one.
    The only thing that is constant is change.
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 351K Banking & Borrowing
  • 253.1K Reduce Debt & Boost Income
  • 453.6K Spending & Discounts
  • 244K Work, Benefits & Business
  • 598.8K Mortgages, Homes & Bills
  • 176.9K Life & Family
  • 257.3K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.