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Age related personal allowance
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adonis10
Posts: 1,810 Forumite


in Cutting tax
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?
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Comments
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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.0 -
Dazed_and_confused wrote: »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?0 -
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 allowance0
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Dazed_and_confused wrote: »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?0 -
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.htm0 -
Dazed_and_confused wrote: »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.0 -
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.htmThis is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0 -
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.0 -
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.0
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