Commentary

E1.910 Personal allowance

Personal and employment tax

E1.910 Personal allowance

Division E1.9     Personal reliefs

Personal allowance

E1.910 Personal allowance

Introduction

Following the introduction of independent taxation in 1990, every individual (regardless of age) who meets the residence conditions and income conditions discussed below can claim the personal allowance. The allowance is deducted at Step 3 of the income tax computation in ITA 2007, s 23 (ie deducted from net income, see E1.101B).

The personal allowance is £12,570 in 2021/22 and is frozen at this level until 5 April 20261. Allowances for earlier years are given in T6.108 and T6.110. The amount of the allowance is reduced if the individual's adjusted net income exceeds £100,000 (see 'Reduction in personal allowance for individuals with income over £100,000' below)2.

Note that as far as tax devolution in Scotland and Wales is concerned, the personal allowance is a reserved matter, which means the level of the allowance is set by the UK Government.

From 6 April 2015 onwards, in certain circumstances it is possible for one spouse or civil partner to transfer 10% of his personal allowance to the other person3. This is known as the transferable tax allowance (or marriage allowance) and is discussed in E1.910B.

For 2015/16 and prior years, enhanced personal allowances were available to individuals meeting certain age requirements, see E1.911.

The personal allowance is discussed below. For details of the blind person's allowance, which is an additional allowance available to the severely sight-impaired, see E1.917.

Entitlement to the personal allowance

Residence condition

In order to claim the personal allowance, the individual must meet the residence condition.

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