A personal allowance gives an individual an annual amount of income free from income tax.

Income above the personal allowances is subject to income tax.

The personal allowance will be reduced if an individual's 'adjusted net income' is above £100,000. The allowance is reduced by £1 for every £2 of income above £100,000.

An individual born before 6 April 1935 may be entitled to a married couple's allowance but this is reduced if 'adjusted net income' is above the married couple's allowance income limit (see table below).

Marriage allowance - 10% of the personal allowance may be transferable between certain spouses where neither pays tax above the basic rate. The Marriage allowance is not available to couples entitled to the Married Couple's allowance.
 

Income tax personal allowances 2017/18
 £
Personal Allowance
 11,500
Marriage Allowance
 1,150
Blind person's allowance
 2,320
Married couple's allowance
either partner born before 6 April 1935
 
- Maximum reduction in tax bill  844.50
- minimum reduction in tax bill  326.00
Married couple's allowance income limit
reduce married couple's allowance by £1 for every £2 of 'adjusted net income' above this limit
 28,000

'Adjusted net income'

Adjusted net income is total taxable income less certain tax reliefs, for example:

• trading losses
• donations made to charities through Gift Aid
• pension contributions.

 

Disclaimer

This publication is published for the information of clients. It provides only an overview of the regulations in force at the date of publication and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this publication can be accepted by the authors or the firm.