Chapter 3 - Personal Allowances

Question 1

What is the blind persons allowance?

Answer 1

2320 - can be transferred if unused to a spouse even if spouse is not blind

Question 2

Tax reducers: Born before 1935

Answer 2

8445
Minimum amount: 3260
Marriage allowance: 1150

Question 3

Income limit for basic personal allowance:

Answer 3

100,000

Question 4

Income limit for married couple’s allowance

Answer 4

28,000

Question 5

What is adjusted net income?

Answer 5

Taxpayers net income less the grossed-up amount of Gift Aid donations made during the year and the gross amount of any pension contributions relieved at source during the year.

Question 6

Conditions for marriage allowance (3)

Answer 6

Transferor is entitled to basic personal allowance for year
Both spouses don’t exceed basic rate of income-not surpasses this after the transfer
Neither the transferor not the spouse claims married couples allowance for the year.
- acts as tax reducer so does not increase the spouses personal allowance - merely reduces tax liability

Question 7

Who is MCA claimed by?

Answer 7

After 5th dec 2005 claimed by higher earner
Before 5th dec 2005 generally claimed y husband unless otherwise elected. MCA is reduced if claimants income exceeds 28000 in 17-18 by 1/2 of excess but never falls below 3260from 8445

Question 8

How is MCA reduced

Answer 8

by each full year passed from marriage/separation - month being 6th - 5th of month