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. |
The summary has been prepared very rapidly and
may contain errors for which we cannot be held responsible. The proposals are
in any event subject to amendment before the Finance Act is passed. Advice
should be taken before any action. |
