Main Income Tax Allowances and Reliefs

	2008/09	2009/10
	£	£
Personal allowance – standard	6,035	6,475
- Age 65 – 74	9,030	9,490
- Age 75 and over	9,180	9,640
Married couple's allowance – minimum amount*	2,540	2,670
- Age 65 – 74 	6,535	N/A
- Age 75 and over*	6,625	6,965
Age-related allowances reduced if total income exceeds ¶	21,800	22,900
Maintenance to former spouse 	2,540	2,670
Employment termination lump sum limit	30,000	30,000

* Relief at 10%. Minimum amount applies for age allowance purposes only.

 Relief available at 10% only if at least one of the couple was born before 6 April 1935.

¶ For 2009/10 the reduction is £1 for every £2 additional income over £22,900 [£21,800 for 2008/09]. Standard allowance(s) only are available if total income exceeds:-

	2008/09	2009/10
	£	£
Taxpayer aged 65 - 74 [personal allowance]	27,790	28,930
Taxpayer aged 65 - 74 [married couple's allowance]	35,780	N/A
Taxpayer aged 75 and over [personal allowance]	28,090	29,230
Taxpayer aged 75 and over [married couple's allowance]	36,260	37,820

Income Tax Rates

	2008/09	2009/10
	£	£
Starting rate on savings income- 10%	1 – 2,320	1 – 2,440
Basic rate	20%	20%
Tax on first £[34,800/37,400] …	6,960	7,480
Higher rate - 40%	Over 34,800	Over 37,400
Discretionary and accumulation trusts (except dividends) *	40%	40%
Discretionary and accumulation trusts (dividends) *	32.5%	32.5%
Ordinary rate on dividends	10%	10%
Upper rate on dividends	32.5%	32.5%

* Up to the first £1,000 of gross income is generally taxed at the standard rate, ie. 10%, or 20% as appropriate.

… Assumes 10% band not available. £7,236 (£6,728 in 2008/09) if full 10% band is available.

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The contents of this Bulletin are based on the proposals put forward by the Chancellor in his Budget speech and explained in documents subsequently published by HMRC and the Treasury.
All Budget proposals may be subject to change before the Finance Act is passed. References to spouse, husband and wife and married couples include references to registered civil partners and civil partnerships.
This Bulletin is provided for general consideration only and no action should be taken or refrained from based on its contents alone. Accordingly, no responsibility can be accepted for any loss occasioned as a result of any such action or inaction.
Professional advice must always be taken.

This news item is provided strictly for general consideration only and is based on our understanding of law and HM Revenue & Customs practice as at July 2008. No action must be taken or refrained from based on its contents alone. Accordingly no responsibility can be assumed for any loss occasioned in connection with the content hereof and any such action or inaction. Professional advice is necessary for every case.

Burley Financial Services Ltd is a private limited company registered in England and Wales under company no. 121 7536.
Burley Financial Services Ltd is authorised and regulated by the Financial Services Authority.
We are entered on the FSA Register no 125891 at www.fsa.gov.uk/register