| The over 65s get extra tax allowances and need to take extra care to make sure they make the most of them. |
| Age allowance This is an addition to the basic personal allowance. For the tax year 2003-04: |
|
You only get the full age allowance if your income is below a set threshold, £18,300 for 2003-04. Over that limit, you lose the extra age allowance at a rate of £1 for every £2 of income. |
|
Withdrawals from insurance company bonds, such as with profits bonds, do not count as income for age allowance purposes. You can take 5 per cent a year from these for 20 years without any immediate tax liability, and it won’t reduce your age allowance either. |
| Married couple’s allowance This was withdrawn in April 2000 for all couples except those where at least one partner was 65 on or before 5 April 2000. For 2003-04, the allowance is set at £5,565 for ages 65-74, and £5,635 for ages 75 and over. This allowance works differently to the personal allowance: you don’t get the full amount to set against your income, you get 10 per cent. So it effectively cuts your tax bill, by £556.50 or £563.50, depending on age. Like age allowance, this allowance also starts to be withdrawn once income goes over the income threshold, again by £1 for every £2 of income over the limit. You don’t lose the full amount, but only down to a basic allowance, equivalent to the indexed amount of the under 65s allowance before it was abolished. The basic allowance is £2,150 for 2003-04. Anyone who was 65 on or before 5 April 2000 can claim married couple’s allowance when they get married. You did not have to be married on that date to qualify. The over 65s get extra tax allowances and need to take extra care to make sure they make the most of them. |
| Age allowance This is an addition to the basic personal allowance. For the tax year 2003-04: |
|
You only get the full age allowance if your income is below a set threshold, £18,300 for 2003-04. Over that limit, you lose the extra age allowance at a rate of £1 for every £2 of income. |
|
Withdrawals from insurance company bonds, such as with profits bonds, do not count as income for age allowance purposes. You can take 5 per cent a year from these for 20 years without any immediate tax liability, and it won’t reduce your age allowance either. |
| Married couple’s allowance This was withdrawn in April 2000 for all couples except those where at least one partner was 65 on or before 5 April 2000. For 2003-04, the allowance is set at £5,565 for ages 65-74, and £5,635 for ages 75 and over. This allowance works differently to the personal allowance: you don’t get the full amount to set against your income, you get 10 per cent. So it effectively cuts your tax bill, by £556.50 or £563.50, depending on age. Like age allowance, this allowance also starts to be withdrawn once income goes over the income threshold, again by £1 for every £2 of income over the limit. You don’t lose the full amount, but only down to a basic allowance, equivalent to the indexed amount of the under 65s allowance before it was abolished. The basic allowance is £2,150 for 2003-04. Anyone who was 65 on or before 5 April 2000 can claim married couple’s allowance when they get married. You did not have to be married on that date to qualify. The over 65s get extra tax allowances and need to take extra care to make sure they make the most of them. |
| Age allowance This is an addition to the basic personal allowance. For the tax year 2003-04: |
|
You only get the full age allowance if your income is below a set threshold, £18,300 for 2003-04. Over that limit, you lose the extra age allowance at a rate of £1 for every £2 of income. |
|
Withdrawals from insurance company bonds, such as with profits bonds, do not count as income for age allowance purposes. You can take 5 per cent a year from these for 20 years without any immediate tax liability, and it won’t reduce your age allowance either. |
| Married couple’s allowance This was withdrawn in April 2000 for all couples except those where at least one partner was 65 on or before 5 April 2000. For 2003-04, the allowance is set at £5,565 for ages 65-74, and £5,635 for ages 75 and over. This allowance works differently to the personal allowance: you don’t get the full amount to set against your income, you get 10 per cent. So it effectively cuts your tax bill, by £556.50 or £563.50, depending on age. Like age allowance, this allowance also starts to be withdrawn once income goes over the income threshold, again by £1 for every £2 of income over the limit. You don’t lose the full amount, but only down to a basic allowance, equivalent to the indexed amount of the under 65s allowance before it was abolished. The basic allowance is £2,150 for 2003-04. Anyone who was 65 on or before 5 April 2000 can claim married couple’s allowance when they get married. You did not have to be married on that date to qualify. |
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