Background Note
14.There are currently three income tax personal allowances provided by reference to an individual’s age; one for people aged under 65 in the tax year; one for people aged 65 to 74 in the tax year; one for people aged 75 and over in the tax year.
15.This section provides that from 2013-14, an individual is entitled to a personal allowance by reference to their date of birth.
16.This section also provides that from 2013-14, the allowances for people born before 6 April 1948 are removed from the indexation provisions for personal allowances.
17.For 2012-13, the amount of these allowances will be:
| Individual aged under 65 in the tax year | £8,105 |
| Individual aged 65 to 74 in the tax year | £10,500 |
| Individual aged 75 and over in the tax year | £10,660 |
18.The amount of the personal allowance for people aged under 65 will be set by a separate section in this Act. The allowances for people aged 65 to 74 and aged 75 and over are set by The Income Tax (Indexation) Order 2011 No. 2926 made on 6 December 2011.
19.The Chancellor has announced that for 2013-14, the personal allowance provided for by section 35 ITA will be £9,205. This will be provided for in Finance Bill 2013.
20.Taken together with the powers provided by this section, the personal allowances for 2013-14 will be:
| Individual born after 5 April 1948 | £9,205 |
| Individual born after 5 April 1938 but before 6 April 1948 | £10,500 |
| Individual born before 6 April 1938 | £10,660 |
21.Existing legislation specifically clarifies that the allowances for people aged 65 to 74 and aged 75 and over in a tax year are unaffected where the individual dies before their birthday. Setting a personal allowance by reference to an individual’s date of birth removes the requirement for this clarification.