Tax
Income tax
Tax is payable on the amount of your income (earned and unearned) less allowances. Everyone is given a personal allowance on which no tax is payable.
This allowance increases at age 65 and again at age 75. Married couples’ allowance only applies where at least one partner was born before 6 April 1935.
You need to be clear as to how your investments affect your tax position. For example if the level of your income falls below the total of your allowances, investments could be made in areas where gross returns are obtainable, or at least where tax is recoverable.
Independent Taxation
The earnings and investment income of a husband and wife are taxed separately at their individual rates, so that a wife’s investment income is taxed at her own rate without regard to her husband’s. Careful thought needs to be given, therefore, as to the name in which investments are made. If investments are held jointly, they are normally deemed to be held on a 50/50 basis.
Tax section links:
a guide to tax | income tax | capital gains tax | inheritance tax | self assessment
