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Finances / Finanzen » uk.finance » Age related personal allowance - limit
| Age related personal allowance - limit [message #376036] |
Fr, 31 März 2006 18:42 |
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Hi,
As a newly 'qualified' OAP, I am not at all sure that I understand how the
limit on the age related personal allowance limit works.
a) Quite a lot of my income is in dividends and/or interest in PEPs, ISAs,
and TOISSAs. Am I correct in assuming that these sums do no affect that
limit?
b) Sometimes I incur capital gains. Am I correct in assuming that these
have no effect, even if they exceed the CGT limit, or even if they do not?
c) Will my wife's pension have any effect upon this - she has a full NI
record plus.
When I was younger I could, easily, have worked out what the marginal tax
rate upon exceeding that limit might be. Nowadays, unfortunately, I can
barely figure out what 2+2 = :-(. Can anyone figure it out, given that I am
never going to be in the 40%, and perhaps even the 22%, bracket?
I apologise in advance for this pathetic use of my OAP status as 'bait' to
get an answer to these questions, - the answers, if any, to which will be
gratefully received. It's a matter of where I should be stuffing my money.
My theory is that dividends from BLUE chip securities, in or out of ISAs
must tend to keep ahead of inflation. Well, I could live for another 20
years, I'm told <s>.
--
GPG
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| Re: Age related personal allowance - limit [message #376061 ] |
Fr, 31 März 2006 23:53 |
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On Fri, 31 Mar 2006 17:42:41 +0100, "GPG"
<gpg [at] noggrantspam.freeserve.co.uk> wrote:
>As a newly 'qualified' OAP, I am not at all sure that I understand how the
>limit on the age related personal allowance limit works.
>
>a) Quite a lot of my income is in dividends and/or interest in PEPs, ISAs,
>and TOISSAs. Am I correct in assuming that these sums do no affect that
>limit?
Correct
>b) Sometimes I incur capital gains. Am I correct in assuming that these
>have no effect, even if they exceed the CGT limit, or even if they do not?
Inside the PEPs and ISAs they are exempt from CGT.
>c) Will my wife's pension have any effect upon this - she has a full NI
>record plus.
You are separate people for income tax purposes, but not for some of
Gordon Brown's tax credit wheezes.
>When I was younger I could, easily, have worked out what the marginal tax
>rate upon exceeding that limit might be. Nowadays, unfortunately, I can
>barely figure out what 2+2 = :-(. Can anyone figure it out, given that I am
>never going to be in the 40%, and perhaps even the 22%, bracket?
Once your income exceeds the limit,currently £19,500, you lose the
age allowance at the rate of £1 for every £2 extra income. That means
your marginal tax rate effectively becomes 33% until the age allowance
has gone, at £23,890, at which point it reverts to 22%.
>I apologise in advance for this pathetic use of my OAP status as 'bait' to
>get an answer to these questions, - the answers, if any, to which will be
>gratefully received. It's a matter of where I should be stuffing my money.
>My theory is that dividends from BLUE chip securities, in or out of ISAs
>must tend to keep ahead of inflation. Well, I could live for another 20
>years, I'm told <s>.
Some will, some will not. The idea is fundamentally sound, however,
especially if you choose shares with dividend yields above the average
for the Market.
--
Terry Harper
URL: http://www.btinternet.com/~terry.harper/
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| Re: Age related personal allowance - limit [message #376079 ] |
Sa, 01 April 2006 13:40 |
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"GPG" <gpg [at] noggrantspam.freeserve.co.uk> wrote:
>a) Quite a lot of my income is in dividends and/or interest in PEPs, ISAs,
>and TOISSAs. Am I correct in assuming that these sums do no affect that
>limit?
Yes
>b) Sometimes I incur capital gains. Am I correct in assuming that these
>have no effect, even if they exceed the CGT limit, or even if they do not?
Yes
>c) Will my wife's pension have any effect upon this - she has a full NI
>record plus.
>
>When I was younger I could, easily, have worked out what the marginal tax
>rate upon exceeding that limit might be. Nowadays, unfortunately, I can
>barely figure out what 2+2 = :-(. Can anyone figure it out, given that I am
>never going to be in the 40%, and perhaps even the 22%, bracket?
Dunno, you both have personal allowances and can allocated the married
persons allowance as well.
>I apologise in advance for this pathetic use of my OAP status as 'bait' to
>get an answer to these questions,
No need to use bait, ask a question, get an answer; simple :-)
I was unaware of this personal allowance being reduced with income
until saw it on Working Lunch yesterday. It had me spitting blood even
though I'm a long way from being 65. Typical nasty action by MPs.
This should answer all your queries -
< URL:http://www.direct.gov.uk/MoneyTaxAndBenefits/PensionsAnd Retirement/MoneyInRetirement/MoneyInRetirementArticles/fs/en ?CONTENT_ID=10014681&chk=pKtSkt>
Daytona
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| Re: Age related personal allowance - limit [message #376087 ] |
Sa, 01 April 2006 15:01 |
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"Daytona" <me [at] privacy.net> wrote in message
news:vsos22t0ffgsuasmv67mlt6emp1fm5oa3b [at] 4ax.com...
> >When I was younger I could, easily, have worked out what the marginal tax
> >rate upon exceeding that limit might be. Nowadays, unfortunately, I can
> >barely figure out what 2+2 = :-(. Can anyone figure it out, given that I am
> >never going to be in the 40%, and perhaps even the 22%, bracket?
>
> Dunno, you both have personal allowances and can allocated the married
> persons allowance as well.
He said he was a 'newly qualified' OAP, so he won't get the married couples'
allowance unless he's a toy boy to a woman in her seventies (one of them needs to be
born before April 1935 to get it).
> >I apologise in advance for this pathetic use of my OAP status as 'bait' to
> >get an answer to these questions,
>
> No need to use bait, ask a question, get an answer; simple :-)
>
> I was unaware of this personal allowance being reduced with income
> until saw it on Working Lunch yesterday. It had me spitting blood even
> though I'm a long way from being 65. Typical nasty action by MPs.
As nothing compared to way the pension credits work, not to mention tax credits. They
make an extra 11% tax look trivial.
--
Andy
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| Re: Age related personal allowance - limit [message #377688 ] |
Mo, 03 April 2006 15:41 |
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In message of Sat, 1 Apr 2006, Daytona writes
>Dunno, you both have personal allowances and can allocated the married
>persons allowance as well.
>
The OP indicated that he has only just become an OAP therefore NO
married person's allowance unless his wife was born before 6th April
1935.
DF
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| Re: Age related personal allowance - limit [message #377701 ] |
Mo, 03 April 2006 20:57 |
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"Andy Pandy" <spam8times [at] wonderful.spam.invalid> wrote:
>He said he was a 'newly qualified' OAP, so he won't get the married couples'
>allowance unless he's a toy boy to a woman in her seventies (one of them needs to be
>born before April 1935 to get it).
Fair enough - I'm not married so those rules pass me by.
Daytona
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| Re: Age related personal allowance - limit [message #377704 ] |
Mo, 03 April 2006 23:09 |
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"Daytona" <me [at] privacy.net> wrote in message
news:vsos22t0ffgsuasmv67mlt6emp1fm5oa3b [at] 4ax.com...
> "GPG" <gpg [at] noggrantspam.freeserve.co.uk> wrote:
<snip>
>
>>I apologise in advance for this pathetic use of my OAP status as 'bait' to
>>get an answer to these questions,
>
> No need to use bait, ask a question, get an answer; simple :-)
>
> I was unaware of this personal allowance being reduced with income
> until saw it on Working Lunch yesterday. It had me spitting blood even
> though I'm a long way from being 65. Typical nasty action by MPs.
>
Why so? If your income is over the £24,000 mark you are no worse off than
before this was introduced. If less then you are better off.
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| Re: Age related personal allowance - limit [message #377807 ] |
Do, 06 April 2006 00:33 |
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"GPG" <gpg [at] noggrantspam.freeserve.co.uk> wrote in message
news:442d5c15$0$3619$ed2e19e4 [at] ptn-nntp-reader04.plus.net...
> Hi,
>
> As a newly 'qualified' OAP, I am not at all sure that I understand how the
> limit on the age related personal allowance limit works.
>
> a) Quite a lot of my income is in dividends and/or interest in PEPs,
> ISAs,
> and TOISSAs. Am I correct in assuming that these sums do no affect that
> limit?
> b) Sometimes I incur capital gains. Am I correct in assuming that these
> have no effect, even if they exceed the CGT limit, or even if they do not?
> c) Will my wife's pension have any effect upon this - she has a full NI
> record plus.
>
> When I was younger I could, easily, have worked out what the marginal tax
> rate upon exceeding that limit might be. Nowadays, unfortunately, I can
> barely figure out what 2+2 = :-(. Can anyone figure it out, given that I
> am
> never going to be in the 40%, and perhaps even the 22%, bracket?
>
> I apologise in advance for this pathetic use of my OAP status as 'bait' to
> get an answer to these questions, - the answers, if any, to which will be
> gratefully received. It's a matter of where I should be stuffing my
> money.
> My theory is that dividends from BLUE chip securities, in or out of ISAs
> must tend to keep ahead of inflation. Well, I could live for another 20
> years, I'm told <s>.
>
> --
> GPG
>
Many thanks for all the contributions, which have been most helpful
GPG
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