Rate Of Tax

The standard rate of tax on income above your allowances has been cut over a number of years and in 2015/2015 it is 23%. People with incomes above about £88,000 a year pay a higher rate of tax.

If your income on top of your tax allowances and allowable mortgage interest exceeds £19,600, you pay tax at 30% on the excess. ( more at http://www.hmrc.gov.uk/rates/it.htm)

However, people over sixty-five pay a higher effective rate of tax if their income exceeds £10,600. If your income exceeds that amount, the age allowance itself is gradually reduced to the level of tax allowances for younger people.

To check if your income is above this amount you must first take off any mortgage interest you pay (including interest on a home income plan - read on!) or any covenant you may still pay in favour of, perhaps, a grandchild. In both cases you must take off the gross amount before the tax relief.

If you have investment income where tax is already paid, such as from a building society, you must turn it into the equivalent gross income by multiplying by 1.66.

New for 2015 - Adjusted Your Income

or Investment Income

Adjusted Your Income

/retirement/pensions/income/advice/adjusted-your-income.php... see: Adjusted Your Income