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Income Tax - Allowances/Reliefs
| Income Tax - Allowances/Reliefs | |||
|---|---|---|---|
| 2018-19 | 2017-18 | ||
| Personal allowance | Aged under 65 (note 5) | £11,850 | £11,500 |
| Income limit for Personal Allowance | £100,000 | £100,000 | |
| Aged 75 and over (notes 1 & 4) | £11,850 | £11,500 | |
| Transferable tax allowance for married couples (notes 2 & 7) | £1,185 | £1,150 | |
| Income limit for age-related allowances | £28,900 | £28,000 | |
| Married Couple's allowance Tax Reduction (note 4) | Either partner born before 6th April 1935 (notes 1-4) |
£8,695 | £8,445 |
| Minimum amount of Married Couple's allowance | £3,360 | £3,260 | |
| Blind Person's allowance (note 6) | £2,390 | £2,290 | |
Notes
- These age-related allowances reduce by £1 for every £2 of income more than the income limit for age-related allowances.
- The Married Couple's Allowance. If you were married before 5th December 2005 and are living together and at least one spouse was born before 6th April 1935, the husband can claim Married Couple's Allowance. HMRC reduce your tax bill by 10% of the Married Couple's Allowance to which you're entitled.
- The Married Couple's Allowance. If you were married or in a civil partnership on or after 5th December 2005 and are living together and at least one spouse or partner was born before 6th April 1935, the person with the higher income can claim Married Couple's Allowance. HMRC reduce your tax bill by 10% of the Married Couple's Allowance to which he or she is entitled.
- Example of Calculating Married Couple's Allowance.
You're 80, entitled to Married Couple's Allowance and have income before allowances of £31,500. HMRC subtract the income limit from your income before allowances £31,500 - £28,900 = £2,600 above the age allowance income limit. Divide this by 2 = £1,300 (allowances reduced by £1 for every £2 above the age income limit). The £1,300 is then deducted from the Married Couple's Allowance leaving a Married Couple's Allowance of £7,395 (£8,695 - £1,300). (Legislation is expected in 2018 to clarify the application of this calculation to Scottish resident tax payers.) - For 2018-19 the personal allowance is progressively withdrawn for income over £100,000 leading to a marginal tax rate of 60% on income in the band £100,000 to £123,700 (£123,000 in 2017-18). In other words, for every £2 over £100,000 your personal allowance is reduced by £1 until your personal allowance becomes zero.
- Blind Person's Allowance is added to your tax free Personal Allowance so is an extra amount of income you can get each year without paying tax. If you are on a low income or even if you don't pay any tax you may be able to transfer your Blind Person's Allowance to your spouse or civil partner.
- Transferable tax allowance. To benefit as a couple, you need to earn less than your partner and have an income of £11,850 or less. If you were eligible for Married Couple's Allowance in the 2017-18 tax year you can backdate your claim to 6th April 2017.
- Neither the personal allowance nor the married couple allowance are available to non-UK domiciled individuals who make a claim to pay tax on the remittance basis of taxation.
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to download the current tax year's abacus Tax Tables pdf booklet
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