Personal Allowances – Tax Tips for Sutton Coldfield Residents
Welcome to the Hill Lillis & Company Tax Tips. As a local accountancy and tax practice we will be providing a short, monthly article outlining tax problem areas and our suggestions on what you can do to resolve the issues.
Everyone with income below £100,000 is entitled to a full personal income tax allowance of £8,105 for the current tax year. However if you are over the age of 65 and your income from all sources is less than £25,400 you can claim an increased allowance of £10,500, and if you are over 75 years old the allowance is increased to £10,660. Any income above these levels is taxable, and at present the tax rates are 20% up to £34,370; 40% up to £150,000 and 50% above that level.
Each person within a family is individually entitled to personal allowances, so it is worthwhile regularly reviewing your situation, so that you make best use of everyone’s allowances.
If family assets are owned jointly, then the default position is that the income should be declared by the owners equally. However in some circumstances you can make an election to confirm that both the underlying capital and income is shared in different proportions.
So, where there is an inequality between the level of income and tax rates being paid by spouses, you may wish to consider how you allocate assets, perhaps by transferring the assets generating the highest levels of income to the partner who pays the lowest levels of tax.
We offer a free 30 minute consultation, so if you would like any additional information regarding the above or any other tax issues concerning you, then please contact us 0121 351 6777 or visit us in our offices in Walmley Village, Sutton Coldfield.
This article appeared in Walmley Pages Magazine, delivered each month to over 4000 homes in
Walmley and surrounding areas of Sutton Coldfield.