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Withdrawal of personal allowances for high earners

If you're a charitable giver with a taxable income of more than £100,000, your liability for the income tax personal allowance will be gradually withdrawn. It is fully withdrawn when your taxable income surpasses £118,880 (for the 2013/14 tax year), meaning that the marginal rate of income tax on income between £100,000 and £118,880 is 60%!

However, the main forms of charitable giving continue to attract tax relief at the highest rate of tax. This briefing paper provides a detailed analysis of how charity tax reliefs interact with the withdrawal of the personal allowance.

Topics covered:

  • Overview
  • The detail
  • Other forms of charity tax relief that reduce adjusted net income
  • Claiming the reliefs
  • Action points
  • Adjusted net income above £150,000