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Guide to Personal Allowance - UK Taxes
The Personal Allowance can benefit almost every UK resident. Some residents from other countries can also take advantage of this allowance. Even if you are an UK national living elsewhere, you are generally eligible for this tax break.
The Personal Allowance during 2009/10 for those under 65 is £6,475. This amount can rise to £9,490 for those between 65 and 74. Anyone over the age of 74 can be eligible for a personal allowance of £9,640.
The higher allowances for those over 65 will not apply over a certain income level. Everyone is always entitled, however, to receive the basic allowance of £6,475. If you are between 65 and 74 and have a taxable income over £28,930 for 2009/10 then you will only receive the basic amount. Anyone 75 or over with a taxable income over £29,230 will also revert to the basic allowance.
Couples over 65 can split their income to receive the optimum tax break. Transferring assets which generate income is also an option for couples. Ownership of assets can be transferred to the partner who pays the lower (or zero) tax rate. Transfers between married couples are generally free from capital gains tax.
The Married Couple's Allowance(MCA) is also available for some married and civil couples. To be eligible for the Married Couple's Allowance, one of the partners must have been born before April 6, 1935. The MCA is different from a personal allowance. It doesn't reduce your taxable income. The MCA calculates an amount to come off your tax bill.
Many UK taxpayers fail to take advantage of the Personal Allowance. If you are employed or receiving a pension then you will automatically receive the Personal Allowance. If you complete a Self Assessment tax return then you will also be credited with this benefit.
You must complete form P161 "Pension Enquiry" to receive the age-related Personal Allowance. You can learn more about eligibility and amounts from HM Revenue & Customs(HMRC). You can also avail of the expertise of a reputable tax service. The Personal Allowance is designed to ease your tax burden.
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Disclaimer: The views expressed in this article are the author's and not necessarily those of UKresident.com or any entity associated with UKresident.com. This article is not checked for accuracy by any qualified immigration consultant or solicitor either represented on this site or otherwise. We will not be legally responsible for any statement made in this article. If you're going through the UK immigration process we strongly advise that you appoint a UK immigration consultant or immigration solicitor to deal with your case.Array
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