When the Chancellor announced his plan in relation to age related allowances, there was much criticism in the press in the name of the “Granny tax”. Despite public outcry the Government decided to go ahead with its plans at the expense of elderly people. Hence, from 6 April 2013 entitlements to age related allowances will be fixed by reference to taxpayers’ date of birth;
- Those who were born before 6 April 1938 will be entitled to £10,660.00;
- Those who were born between 6 April 1938 and 5 April 1948 will be entitled to £10,500.00; and
- Those who were born after 5 April 1948 will be entitled to standard personal allowances that all taxpayers are entitled to.
Following 6 April 2013, these amounts will not be increased annually. However, if a taxpayer earns more than £25,400.00 a year, the age related allowances set out above will be reduced by £1 for every £2, but the amount will not be lower than the standard personal allowance for the current tax year.
Tulin Kiranoglu, Solicitor, Tax Advisor