1 - Income Tax (H)

Question 1

What is the income tax personal allowance?

Answer 1

£12,570

Question 2

Is the personal allowance deducted from taxable income, before or after calculating tax liability?

Answer 2

Before

Question 3

Income tax personal allowance is not available to taxpayers in which band?

Answer 3

Additional rate taxpayers

Question 4

The personal allowance is reduced by £1 for every £2 that a person’s adjusted net income
exceeds what amount?

Answer 4

£100,000

Question 5

What is the marriage allowance/marriage tax allowance and how does it work?

Answer 5

A transfer of 10% of the £12,570 personal allowance to a spouse or civil partner = £1,260 rounded from £1,257.

Question 6

When is a transfer of the marriage allowance/marriage tax allowance not allowed? Name 2 circumstances.

Answer 6

When receiving spouse already earns in excess of the basic rate.
When either spouse has claimed mmarried couples allowance (which is different to marriage allowance)

Question 7

What is the minimum amount that can be transferred to a spouse when using the marriage allowance/marriage tax allowance?

Answer 7

£1,260
In other words, it must be 10%, all or nothing

Question 8

How far can the marriage allowance/marriage tax allowance be backdated?

Answer 8

4 tax years

Question 9

Why might someone opt to use the married couples allowance over the marriage allowance?

Answer 9

Becuase your tax is reduced by a greater amount

Question 10

What is the married couples allowance amount and who does it apply to?

Answer 10

£10,375
Either spouse born before 6 April 1935

Question 11

You can only have one married couples allowance, as opposed to one for each spouse. Who does the married couples allowance belong to if married before 5 December 2005?

Answer 11

Husband, but can be transferred

Question 12

You can only have one married couples allowance, as opposed to one for each spouse. Who does the married couples allowance belong to if married after 5 December 2005?

Answer 12

For couples who married on or after 5 December 2005 and for same-sex partnerships registered under the Civil Partnership Act 2004, the allowance in any tax year is given to the partner who is the higher earner in that year.

Question 13

At what amounts can the personal allowance trap occur and why does it happen?

Answer 13

£100,000 - £125,140
Becuase of the personal allowance tapering

Question 14

At what rate is the personal allowance withdrawn when income exceeds the income limit of £100,000?

Answer 14

£1 for every £2 over and up to £125,140

Question 15

How much is the blind persons allowance?

Answer 15

£2,870

Question 16

What are the 2023/24 personal allowances for the following taxpayers:

Basic
Higher
Additional

Answer 16

Basic £1,000
Higher £500
Additional £0