Rates and allowances for income tax, corporation tax, capital gains tax, inheritance tax and the pension schemes earnings cap are set out below. All allowances, thresholds and limits for 2000-01 have risen in line with statutory indexation and rounding rules.
1999-00 (pnds) 2000-01 (pnds) Increase(pnds) Income tax allowances Personal allowance 4335 4385 50 Personal allowance – aged 65-74 5720 5790 70 Personal allowance – aged 75 and over 5980 6050 70
Married couple’s allowance – aged 65 before 6 April 2000 5125 5185 60 Married couple’s allowance – aged 75 or more 5195 5255 60 Married couple’s allowance – minimum amount 1970 2000 30
Income limit for age-related allowances 16800 17000 200
Widow’s bereavement allowance 1970 2000 30
Blind person’s allowance 1380 1400 20
Capital gains tax annual exempt amount
Individuals etc 7100 7200 100 Other trustees 3550 3600 50
Inheritance tax threshold 231000 234000 3000
Pension schemes earnings cap 90600 91800 1200
Taxable bands 1999-00 (pounds) Taxable bands 2000-01 (pounds) Starting rate 10% 0 – 1500 Starting rate 10% 0 – 1520 Basic rate 23% 1501 – 28000 Basic rate 22% 1521 – 28400 Higher rate 40% Over 28000 Higher rate 40% Over 28400
Corporation tax profits Corporation tax profits 1999-00 (pounds) 2000-01 (pounds)
Starting rate 10% 0 – 10000
Marginal relief 10001 – 50000
Small companies’ Small companies’ rate 20% 0 – 300000 rate 20% 50001 – 300000 Marginal relief 300001 – 1500000 Marginal relief 300001 – 1500000
Main rate 30% 1500001 or more Main rate 30% 1500001 or more
The main rate of corporation tax for 2001-02 will be 30 per cent.
NOTES FOR EDITORS
Income tax rates and allowances
1. The rate of tax applicable to savings income in section 1A, ICTA 1988, other than dividends, is 10 per cent for income in the starting rate band, and 20 per cent for income falling between the starting rate and basic rate limits. The rates of tax applicable to dividends are 10 per cent for income below the basic rate limit and 32.5 per cent above it.
2. The married couple’s allowance for couples in which neither partner has reached the age of 65 before 6 April 2000 and the associated reliefs (the additional personal allowance, widow’s bereavement allowance and relief for maintenance payments) are withdrawn from April this year. Women who were widowed during 1999-2000 keep their widow’s bereavement allowance in 2000-01 for the second year of their entitlement, unless they remarry before 6 April. The rate of relief for the widow’s bereavement allowance, and the continuing married couple’s allowance and maintenance relief for people born before 6 April 1935, is 10 per cent. The Children’s Tax Credit, which replaces the married couple’s allowance, will be introduced from April 2001-02. Capital gains tax
3. The annual exempt amount is increased to 7,200 pounds for individuals, certain trustees, and personal representatives of the estate of a deceased person, and 3,600 pounds for other trustees. In 1999-00, capital gains above the annual exempt amount are taxed at 20 per cent below the basic rate limit and 40 per cent above it. For 2000-01, gains below the starting rate limit will be taxed at 10 per cent, gains between the starting rate and basic rate limits will be taxed at 20 per cent, and above the basic rate limit at 40 per cent. Rates for trusts
4. The rate applicable to trusts remains unchanged at 34 per cent for 2000-01 and the Schedule F trust rate remains unchanged at 25 per cent. Inheritance tax
5. The value of estates above the threshold is taxed at 40 per cent. The estimated number of taxpaying estates in 2000-01will be about 23,500 compared with 21,000 in 1999-00. This is around 4 per cent of all deaths. Pension schemes earnings cap
6. The maximum level of earnings from which tax approved occupational and personal pension provision may be made is increased to 91,800 pounds. The cap’s main effect is to set a ceiling on the contributions that can be paid to,and the benefits that can be paid by, tax approved pension schemes. It generally applies to people who contribute to a personal pension scheme, joined an occupational scheme set up since 14 March 1989, or joined any occupational scheme from 1 June 1989 which was set up before 14 March 1989. Corporation tax
7. The small companies’ rate for 2000-01 will be 20 per cent. The main rate for 2001-02 will be 30 per cent. The main rate for 2000-01 was set at 30 per cent in the last Budget.
8. Marginal relief will ease the transition from the starting rate to the small companies’ rate for companies with profits between 10,000 pounds and 50,000 pounds. The fraction for calculating this marginal relief will be one fortieth.Marginal relief will also apply to companies with profits between 300,000 pounds and 1,500,000 pounds. The fraction for calculating this marginal relief will also be one fortieth.
9. The starting rate and the small companies’ rate do not apply to close investment holding companies.
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