inspire: financial management

Personal Tax Rates

Income Tax Rates

2007/08		2006/07
Band (£)	Rate (%)	Band (£)	Rate (%)
0 - 2230	10	0 - 2150	10
2231 - 34600	22*	2090 - 32400	22*
Over 34600	40**	Over 33300	40**

* Except dividends (10%) and savings income (20%)

** Except dividends (32.5%)

Other income taxed first, then savings income and finally dividends.

Income Tax Reliefs

(Allowances that reduce taxable income)

		2007/08	2006/07
Personal allowance	- under 65	5225	5035
	- 65 - 74*	7550	7280
	- 75 and over*	7690	7420
Married Couple's allowance	- less than 75 and born before 06.04.35*	6285	6065
	- 75 and over*	6365	6135
	- min. amount	2440	2350
*Age allowance income limit		20900	20100
(reduce age allowance by £1 for every £2 of excess income over £20100)
Blind person's allowance		1730	1660

Tax Credits

	2007/08	2006/07
	£	£
Working Tax Credit
Basic element - Max	1730	1665
Childcare element 80% of eligible costs up to £175 per week (£300 if two or more children)
Child tax credit
Child element per child - Max	1845	1765
Family element	545	545
Baby addition	545	545
Reductions in maximum rates
37% of income above £5220* pa

* If only child tax credit is claimed, the threshold is £14495 pa. (£14155) The family element of child tax credit is not reduced unless income is more than £50000pa when it is reduced by £1 for every £15 of additional income.

Pension Premiums 2007/08

• Tax relief available for personal contributions: higher of £3600 (gross) or 100% of relevant earnings.
• Employers will obtain tax relief on employer contributions if they are paid and made 'wholly and exclusively'. Tax relief for large contributions may be spread over several years.
• Any contributions in excess of £225000, (£215000) whether personal or by the employer, will be subject top income tax on the individual at 40%.
• No carry back of pension contributions.

Individual Savings Accounts (ISAs)

2007/08 and 2006/07
		£
Overall investment limit	- Maxi ISA	7000
	- Mini ISA - stocks shares and life insurance	4000
	- Cash	3000

Main Social Security Benefits

Weekly Benefit		2007/08	2006/07
Basic Retirement Pension	- Single person	£87.30	£84.25
	- Married couple	£139.60	£134.75
Statutory pay rates	- average weekly earnings	£87 (£84) or over
Statutory Sick Pay		£72.55	£70.05
Statutory Maternity Pay
First Six Weeks		90% of weekly earnings
Next 33Weeks**		£112.75*	£108.85*
Statutory Paternity Pay	- two weeks	£112.75*	£108.85*
Statutory Adoption Pay	- 26 weeks	£112.75*	£108.85*
* Or 90% of weekly earnings if lower
** For Children due/placed from 1 April 2007

Capital Gains Tax

	2007/08	2006/07
Individuals	£	£
Exemption	9200	8800
Balance of gains (reduced by taper relief) charged as top slice of income (at savings rates - i.e. 10%, 20% or 40%)
Trusts
Exemption	4600	4400
Balance of gains (reduced by taper relief)	40%	40%

Taper relief 2007/08

Percentage relief depends on number of complete years asset owned after 05.04.98

Year of ownership	1	2	3	4	5	6	7	8	9	10
Business assets (% relief)	50	75	75	75	75	75	75	75	75	75
Non-business assets *(% relief)	0	0	5	10	15	20	25	30	35	40

*Add one extra year if asset owned before 17.03.98 (subject to overridding max. of 40%)

Inheritance Tax

Death	Lifetime	Chargeable Transfers
Rate	Rate	2007/08	2006/07
%	%	£(000)	£(000)
Nil	Nil	0 - 300	0 - 285
40	40	over 300	over 285

Reliefs
Annual Exemption	£3000	Marriage	- Parent	£5000
			- Grandparent	£2500
			- Bride/Groom	£2500
			- Other	£1000

Reduced charge on gifts within seven years of death

Years before death	0-3	3-4	4-5	5-6	6-7
% of death charge	100	80	60	40	20

Stamp Duty and Land Tax

Land and buildings (on full consideration paid)

Rate	Residential property		Non-residential
	Disadvantaged areas	Other
	£	£	£
Nil	0-150,000	0-125,000*	0-150,000
1%	150,001 - 250,000	125,001 - 250,000	150,001 - 250,000
3%	250,001 - 500,000	250,001 - 500,000	250,001 - 500,000
4%	Over 500,000	Over 500,000	Over 500,000

*Limit raised to £125,000 (£120,000) from 23 March 2006.
Shares and securities - rate remains unchanged at 0.5%.