Introduction Background Note
10.Individuals, who meet the conditions set out in section 35 of ITA, are entitled to a personal allowance to be set against their income. In 2009-10, the personal allowance for individuals aged below 65 is £6,475, £9,490 for those aged 65 to 74 and £9,640 for those aged 75 and over.
11.From 2010-11, where an individual’s adjusted net income exceeds £100,000 their personal allowance will be reduced by one-half of the excess. For example, in 2010-11 an individual with an adjusted net income of £100,002 will have their personal allowance reduced by £1.
12.The calculation of an individual's adjusted net income for the purposes of these new income-related reductions to personal allowances is provided for by section 58 of ITA; it is the same measure of income that is used for the calculation of existing income-related reductions to personal allowances for those aged between 65 and 74, and those aged 75 and over. Using adjusted net income as the measure of an individual's income will provide consistency across all the reductions that will apply to personal allowances from 2010-11.