REV 1
7 March 2001
INLAND REVENUE TAX RATES AND ALLOWANCES FOR 2001-2
Rates and allowances for income tax, corporation tax, capital gains tax, inheritance tax and the pension schemes earnings cap are set out below.
| 2000-01 (£) | 2001-02 (£) | Increase (£) | |
| Income tax allowances | |||
|
Personal allowance Personal allowance for people aged 65-74 Personal allowance for people aged 75 and over |
4 385 5 790 6 050 |
4 535 5 990 6 260 |
150 200 210 |
| Income limit for age-related allowances | 17 000 | 17 600 | 600 |
|
Married couple's allowance for people born before 6 April 1935 Married couple's allowance ?aged 75 or more Minimum amount of married couple's allowance |
5 185 5 255 2 000 |
5 365 5 435 2 070 |
180 180 70 |
| Children's tax credit | - | 5 200 | - |
| Blind person's allowance | 1 400 | 1 450 | 50 |
|
Capital gains tax annual exempt amount: Individuals etc Other trustees |
7 200 3 600 |
7 500 3 750 |
300 150 |
| Inheritance tax threshold | 234 000 | 242 000 | 8 000 |
| Pension schemes earnings cap | 91 800 | 95 400 | 3 600 |
| Taxable bands 2000-01 (£) | Taxable bands 2001-02 (£) | ||
| Starting rate 10 per cent | 0 - 1 520 | Starting rate 10 per cent | 0 - 1 880 |
| Basic rate 22 per cent | 1 521 - 28 400 | Basic rate 22 per cent | 1 881 - 29 400 |
| Higher rate 40 per cent | Over 28 400 | Higher rate 40 per cent | Over 29 400 |
| Corporation tax profits 2000-01 (£) | Corporation tax profits 2001-02 (£) | ||
| Starting rate 10 per cent | 0 - 10 000 | Starting rate 10 per cent | 0 - 10 000 |
| Marginal relief |
10 001 ?50 000 |
Marginal relief |
10 001 - 50 000 |
| Small companies? rate 20 per cent | 50 001 - 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 2002-03 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 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 rate of relief for the continuing married couple's allowance and maintenance relief for people born before 6 April 1935, and for the children's tax credit, is 10 per cent.
3. As announced in the Pre-Budget Report, personal allowances for those aged 65 or over will be increased by £240 over indexation in 2003-04. The new levels will then be increased by reference to the rise in earnings for the rest of the next Parliament.
Capital gains tax (CGT)
4. The annual exempt amount is increased to £7,500 for individuals, trustees of settlements for the disabled, and personal representatives of the estate of a deceased person, and £3,750 for other trustees. The amount chargeable to CGT is added onto the top of income liable to income tax for individuals and is charged to CGT at these rates: below the starting rate limit at 10 per cent, between the starting rate and basic rate limits at 20 per cent, and above the basic rate limit at 40 per cent.
Rates for trusts
5. The rate applicable to trusts remains unchanged at 34 per cent for 2001-02 and the Schedule F trust rate remains unchanged at 25 per cent.
Inheritance tax
6. The value of estates above the threshold is taxed at 40 per cent. The estimated number of taxpaying estates in 2001-02 will be about 23,000, broadly the same as the expected out-turn for 2000-01. This is around 4 in 100 of all deaths.
Pension schemes earnings cap
7. The main effect of the cap 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. From 6 April 2001 the cap will apply to people who contribute to stakeholder pension schemes.
Corporation tax
8. Marginal relief eases 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 also applies 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.
INLAND REVENUE PRESS OFFICE
Media enquiries to: 020 7438 6692 / 6706 / 7327 (out of hours: 07860 359544)
Non-media enquiries to: 020 7438 6420 / 6425 (Office hours only)
Inland Revenue information is on the Internet: