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Suppossing the adjusted personal allowance of a taxpayer earning more than pounds100,000 (having taken into consideration PPS and gift aid) is calculated to be pounds 6,000 less than the standard 8,105, which one do you take, when calculating taxable income if;
– the taxpayer is below 65years?
– between 65-75years?
-above 75years?
NB. In otherwords, can you charge personal allowance of less than pounds 8,105 when computing taxable income?Hi biwowa
I would firstly ask you to read carefully and work the examples in sections 4 & 5 of chapter 2 on pages 10 – 12 of the OT Course Notes.From this you will see that if the “adjusted net income (ANI)” of the taxpayer exceeds the income limit of £100,000 then the standard personal allowance (PA) of £8,105 is indeed reduced. If the taxpayer therefore had ANI of £112,000 the PA would be reduced by £6,000 and you would therefore deduct a PA of £2,105 from net income in deriving the taxable income of the taxpayer.
At this level of income the age of the taxpayer will be irrelevant as any higher personal age allowance (PAA) will already have been reduced to the standard PA as the income limit at which we start to reduce the PAA is only £25,400!
Hope this helps
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