Personal allowances are fixed for 2014/15 at £10,000, the level promised in the Coalition Agreement. However, the Budget announced that there will be a further (above inflation) increase to £10,500 for 2015/16, in line with the allowance currently available to taxpayers aged 65 to 74. Those aged 75 and over will continue to receive a personal allowance of £10,660. Note that if adjusted net income exceeds £100,000, the personal allowance is reduced by £1 for every £2 over £100,000. This gives an effective rate of 60% on income between £100,000 and £120,000 for 2014/15. Contact us for planning advice to avoid this 60% rate.
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