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with a taxable income of more than £100,000, your liability for the income tax personal allowance will be gradually withdrawn. It is fully withdrawn when your taxable income surpasses £118,880 (for the 2013/14 tax year), meaning that the marginal rate of income tax on income between £100,000 and £118,880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