Personal and trust taxation
Income tax allowances, reliefs and credits |
2006-07 |
2005-06 |
| Personal (basic) |
£5,035 |
£4,895 |
| Personal (age 65-74) |
£7,280 |
£7,090 |
| Personal allowance (age 75 and over) |
£7,420 |
£7,220 |
| Married/civil partners (minimum) at 10%* |
£2,350 |
£2,280 |
| Married/civil partners (age under 75) allowance at 10% * |
£6,065 |
£5,905 |
| Married/civil partners (age 75 and over) allowance at 10% |
£6,135 |
£5,975 |
| Age related relief reduced by 50% of income over |
£20,100 |
£19,500 |
| Child Tax Credit (CTC) |
- family element
- family element baby addition
CTC usually reduced by 6.67% of joint income |
|
£545
£545
£50,000 |
£545
£545
£50,000 |
| Childcare and childcare vouchers (weekly tax-free limit) |
£55 |
£50 |
| Blind person's allowance |
£1,660 |
£1,610 |
| Rent-a-room tax-free income |
£4,250 |
£4,250 |
| Venture Capital Trust (VCT) up to £200,000 |
30% |
40% |
| Enterprise Investment Scheme (EIS) at 20% up to |
£400,000 |
£200,000 |
| EIS eligible for capital gains tax re-investment relief |
No limit |
No limit |
| Pension Scheme |
- annual allowance
- lifetime allowance
- earnings cap |
|
£215,000
£1,500,000
--- |
---
---
£105,600 |
* Where
at leat one spouse/civil partner was born before 6 April 1935 |
Income tax rates |
2006-07 |
2005-06 |
| Starting rate 10% on first |
£2,150 |
£2,090 |
| Basic rate (20% for savings income) 22% on next |
£31,150 |
£30,310 |
| Higher rate 40% on income over |
£33,300 |
£32,400 |
| Dividends |
- basic rate taxpayers
- higher rate taxpayers |
|
10%
32.5% |
10%
32.5% |
| Pre-owned assets tax (charge as income) - minimum taxable |
£5,000 |
£5,000 |
| Trusts |
- standard rate band generally
- dividends (rate applicalbe to trusts - RAT)
- other income (rate applicalbe to trusts - RAT) |
|
£1,000
32.5%
40% |
£500
32.5%
40% |
Venture capital schemes
For investments in venture capital trusts (VCTs) made after
5 April 2006, the income tax rate of relief will be reduced
to 30% and the minimum qualifying holding period will increase
from three years to five years. From the same date, the annual
investment limit for income tax relief for enterprise investment
schemes (EIS) will double to £400,000. From 6 April 2007,
money held by a VCT will be treated as an investment in qualifying
holdings.
The limit to the maximum size of companies able to raise
money under the VCT, EIS and corporate venturing scheme (CVS)
is reduced to £7m before investment and £8m afterwards. This
will not apply to funds raised before 6 April 2006 for VCTs
or for subscriptions to EIS or CVS shares made before 22 March
2006.
Taxation of trusts
From 6 April 2006, there will be a package of changes to
the tax treatment of trusts. These will provide common definitions
for income tax and capital gains tax, as well as increasing
the standard rate band to £1,000. A parent will be regarded
as having an interest in a settlement for capital gains tax
purposes (as well as income tax) if their dependent minor
child is a beneficiary. As a result, gains may be taxable
on the parent. From 6 April 2007, the test for trustee residence
will be the same for both income tax and capital gains tax.
Child trust fund
The government will pay £250 (£500 for lower-income families)
into each child trust fund account when the child reaches
the age of seven. This will be in addition to the payment
at birth. |
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