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Budget
REV1
21 March 2000
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 (£) | 2000-01 (£) | Increase (£) | |
| Income tax allowances | |||
|
Personal allowance < font>– age 65-74 Personal allowance – age 75 and over |
4 335 5 720 5 980 |
4 385 5 790 6 050 |
50 70 70 |
|
Married couple’s allowance – age 65 before 6 April 2000 Married couple’s allowance – age 75 or more Married couple’s allowance – minimum amount |
5 125 1 970 |
5 365 5 255 2 000 |
180 60 30 |
| Income limit for age-related allowances | 16 800 | 17 000 | 200 |
| Widow’s bereavement allowance | 1 970 | 2 000 | 30 |
| Blind persona’s allowance | 1 380 | 1 400 | 20 |
| Capital gains tax annual exempt amount |
7 100 3 550 |
7 200 3 600 |
100 50 |
|
Individuals etc Other trustees |
|||
| Inheritance tax threshold | 231 000 | 234 000 | 3 000 |
| Pension schemes earnings cap | 90 600 | 91 800 | 1 200 |
| Taxable bands | 1999-00 (£) | Taxable bands | 2000-01 (£) |
| Starting rate 10 per cent | 0 – 1 500 | Starting rate 10 per cent | 0 – 1 520 |
| Basic rate 23 per cent | 1 501 – 28 000 | Basic rate 22 per cent | 1 521 – 28 400 |
| Higher rate 40 per cent | Over 28 000 | Higher rate 40 per cent | Over 28 400 |
| Corporation tax profits | 1999-00 (£) | Corporation tax profits | 2000-01 (£) |
| Starting rate 10 per cent | 0 – 10 000 | ||
| Marginal relief | 10 001 – 50 000 | ||
| Small companies ’ rate 20 per cent | 0 – 300 000 | Small companies ’ rate 20 per cent | 50 001 – 300 000 |
| Marginal relief | 300 001 – 1 500 000 | Marginal relief | 300 001 – 1 500 000 |
| Main rate 30 per cent | 1 500 001 or more | Main rate 30 per cent | 1 500 001 or more |
The main rate of corporation tax for 2001-02 will be 30 per cent.
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 for individuals, certain trustees, and personal representatives of the estate of a deceased person, and £3,600 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 2000-01 will 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. 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 Â’ 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 and £50,000. The fraction for calculating this marginal relief will be one fortieth. Marginal relief will also apply to companies with profits between £300,000 and £1,500,000. 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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