Tax Allowances & Exemptions
We always recommend you take professional advice when it comes to tax matters and the CGA is well placed top make introductions to highly respected advisors. For the purposes of reference we show the personal tax allowances and exemptions for the 2011/12 and 2010/11 tax years.
Income tax allowances, reliefs and credits
| 2011/12 | 2010/11 | |
| Personal (basic) | £7,475 | £6,475 |
| Personal allowance reduced by 50% of income over | £100,000 | £100,000 |
| Personal (age 65-74) | £9,940 | £9,490 |
| Personal (age 75 and over) | £10,090 | £9,640 |
| Married couples/civil partners (minimum) at 10%* | £2,800 | £2,670 |
| Married couples/civil partners (maximum) at 10%* | £7,295 | £6,965 |
| Age-related relief reduced by 50% of income over | £24,000 | £22,900 |
| Child Tax Credit (CTC): | ||
| • family element | £545 | £545 |
| • family element baby addition | Nil | £545 |
| CTC usually reduced where joint income is over | £40,000 | £50,000 |
| Rate of reduction of CTC | 41% | 6.67% |
| Blind persons | £1,980 | £1,890 |
| Rent-a-room tax-free income | £4,250 | £4,250 |
| Venture Capital Trust (VCT) £200,000 maximum | 30% | 30% |
| Enterprise Investment Scheme | ||
| (EIS) £500,000 maximum | 30% | 20% |
| EIS eligible for capital gains tax deferral relief | No limit | No limit |
| Registered Pension Scheme: | ||
| • annual allowance | £50,000** | £255,000 |
| • lifetime allowance | £1,800,000 | £1,800,000 |
* Where at least one spouse/civil partner was born before 6 April 1935.
** Eligible members of registered pension schemes may carry forward unused annual allowance of up to £50,000 a year for three tax years from 2008/09.
Income tax rates
| 2011/12 | 2010/11 | |
| Starting rate of 10% on savings income up to | £2,560 | £2,440 |
| Basic rate of 20% on income up to | £35,000 | £37,400 |
| Higher rate of 40% on income | £35,001-£150,000 | £37,401-£150,000 |
| Additional rate of 50% on income over | £150,000 | £150,000 |
| Dividends for: | ||
| • basic rate taxpayers | 10% | 10% |
| • higher rate taxpayers | 32.5% | 32.5% |
| • additional rate taxpayers | 42.5% | 42.5% |
| Pre-owned assets tax (charged as income) | ||
| – minimum taxable | £5,000 | £5,000 |
| Trusts: | ||
| • standard rate band generally | £1,000 | £1,000 |
| • dividends (rate applicable to trusts) | 42.5% | 42.5% |
| • other income (rate applicable to trusts) | 50% | 50% |
