Main Income Tax Reliefs

Allowed at top rate of tax	2008/09	2007/08
Personal Allowance	£6,035	£5,225
Personal Allowance (65-74)#	£9,030	£7,550
Personal Allowance (75 and over)*	£9,180	£7,690
Blind Person’s Allowance	£1,800	£1,730

Allowed only at 10%	2008/09	2007/08
Married Couple’s Allowance (up to 74)*#	£6,535	£6,285
Married Couple’s Allowance (75 and over)*#	£6,625	£6,365
Income limit for age-related allowances	£21,800	£20,900

*Only available if born before 6th April 1935
#Age allowances are reduced £1 for every £2 by which income exceeds the income limit, until the age allowance is reduced to the normal allowance. Personal allowance is reduced before married couple’s allowance, MCA is reduced to a minimum of £2,540 (2007/08: £2.440).

Income Tax rates and bands	2008/09	2007/08
Lower rate on first	NA	£2,230
Basic rate on next	£34,800	£32,370
Higher rate on taxable income over	£36,000	£34,600

Tax rates 2008/09	D	I	O
Rates differ for D = Dividends. I = Interest. O = Other.
Basic rate	10%	20%	20%
Higher rate	32.5%	40%	40%

The first £2,320 of interest is taxed at 10%. This relief is reduced by the amount the tax payers non savings income exceeds allowances.

Car benefit assessment 2008/09

Charge based on a percentage of the initial list price of the car, including accessories, delivery charges and VAT. The percentage depends on the carbon dioxide emissions rating of the car and whether the engine runs on petrol or diesel.

Cars with 120g/km or less CO₂ emissions	Petrol	Diesel
Cars with 120g/km or less CO₂ emissions	10%	13%

Other Cars	Petrol	Diesel
Minimun	15%	18%
over 135g/km	+1% for each additional 5g/km over 135g/km
Maximum	35%	35%

Special rules apply to older cars, which do not have a CO₂ rating. Employee contributions are deducted from the list price. Company vans are charged at £3,000 if private use is more than home-to-work travel. An additional amount of £500 is charged if fuel is provided free for unrestricted private use.

Car fuel Benefit

The benefit of free fuel for private use in a company car is calculated using the same percentage as that used for the car benefit, applied to a standard figure of £16,900. The taxable amount is therefore between £2,535 and £5,915. (cars with emissions under 120 g/km £1,690 or £2,197)

Tax free mileage allowances (2008/09 & 2007/08 unchanged)
	Higher Rate	Lower Rate
All cars	40p	25p
Motorcycles	24p	24p
Bicycles	20p	20p
Business passengers	5p	5p

Higher rate allowed up to 10,000 business miles. Where the employer pays less than the authorised rate the employee can claim tax relief on the difference.

Inheritance Tax

Rates percentage
0 - £312,000	Nil
Above £312,000	40%

From 9th October 2007 the unused Nil rate band may be transferred to the surviving spouse / civil partner on the death of the first spouse / partner.

Reduced tax charge on transfers within 7 years of death

Years before death	Percentage of death rates
0 – 3	100%
3 – 4	80%
4 – 5	60%
5 – 6	40%
6 – 7	20%
Over 7	Nil

Capital Gains Tax

Annual exempt amount 2008/09: individuals £9,600, most trustees £4,800. The Capital Gains Tax rate for 2008/09 is 18%.

Entrepreneurs Relief – This newly introduced relief effectively reduces the rate on some gains to 10%.
The lifetime limit for this relief is £1,000,000.

Stamp Duty and Stamp Duty Land Tax

Rates on sales	% of Total Conideratiosn
Shares and marketable securities	0.5%
Land 0 – threshold	NIL
Threshold - £250,000	1%
£250,001 - £500,00	3%
£500,001 and over	4%

The threshold is £125,000 for residential property and £150,000 for commercial property. In "disadvantaged areas", the residential threshold is £150,000. New zero carbon homes with a purchase price of up to £500,000 are exempt. A relief of £15,000 applies to homes with a purchase price in excess of £500.00.

For further informtation please Click Here to visit the HM Revenue & Customs Website.