Main income tax reliefs and credits                     2007–08 

Personal allowance                                                                                                                           5,225

Value of Child tax credit. Normally reduced by 6.67% of joint income over £50,000                                               

– Family element                                                                                                                                 545

– Family element baby addition                                                                                                        545

- Childcare and childcare vouchers per week                                                                                50

Age allowances (born before 6 April 1935)

Single person (under 75)                                                                                                                   7,550   

Single person (75 and over)                                                                                                              7,690

Married/ civil partners (at least one born before 6 April 1935)                                                     6,285*

Minimum married/civil partners (at least one born before 6 April 1935)                                   2,440*

Excess over personal allowance - reduced by £1 for overy £2 of income over                       20,900

* Relief is restricted to 10%.

Income tax rates

Income taxed at 10%,                                                                                                                          0 - 2,230

Income taxed at 22%†                                                                                                                         2,231 - 34,600

Income taxed at 40%+                                                                                                                         over 34,600 

† Dividends taxed at 10%, savings income at 20%.

+Dividends are taxed at 32.5%.

PENSIONS 2007–08 'SIMPLIFIED REGIME                                                                                       2007-08

Lifetime allowance*                                                                                                                              £1,600,000

Lifetime allowance charge                                                                                                                  55% if excess is drawn as cash

                                                                                                                                                                  25% if excess is drawn as income

Annual allowance                                                                                                                                  £225,000

Annual allowance charge                                                                                                                    40% of excess

Maximum relievable personal contribution                                                                                     100% of relevant UK earnings or £3,600 if greater

Maximum tax-free cash*                                                                                                                      25% of pension benefit value

* Subject to transitional protection for excess amount.