16:37 21 March 2013
There are so many ways for older people to reduce their taxes. Some of them are the following:
1. Know your tax free allowance. The tax free allowance for under 65’s for 2012/2013 tax year is £8,105. Once you turn 65, the allowance will increase substantially. For 2012/2013 tax year, the tax allowance for 65 and older is £10,500.
a. For anyone who is 75 years old and older, tax free allowance is £10,660.
b. If your total income is £25,400 or less you are entitled to full age-related allowance.
c. If you earn more than £25,400, you’ll pay at the rate of £1 for every £2 for any amount that exceeds £25,400.
d. If your income is above £114,950, you will not be entitled to tax-free allowance.
2. Stop paying National Insurance contributions once you hit 62, if you’re a woman and 65 years old if you’re a man.
3. Gift Aid. For people over 65 years old, you can reduce your taxable income by making donations to charity through Gift Aid.
4. Reduce inheritance tax. You do not have to pay taxes on gifts that you give to other people if you live seven more years. Know the total amount of gifts that you can give out per year and maximize it.
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