Claiming the personal allowance
In this post we're going to discuss claiming the personal allowance. We'll discuss who qualifies and the circumstances where disclaiming the personal allowance may be appropriate.
Claiming the personal allowance - who qualifies?
The personal allowance (currently £12,570) is available to anyone who falls within the following categories.
What about non-UK residents?
If you are a UK national you are entitled to claim UK Personal Allowances, regardless of whether you are UK tax resident.
However from 6 April 2010, UK tax allowances are not available solely on the grounds of being a Commonwealth citizen. However if you are a national of the countries listed here in HMRC's manuals here and non-UK tax resident. You may also be entitled to claim UK personal allowances.
Claiming the personal allowance as a non-UK resident
Essentially there are two methods of claiming the personal allowance if you are a non-UK resident.
You can also claim the Transferable Marriage Allowance if both spouses are entitled to a personal allowance, regardless of whether you live abroad or in the UK, as long as you meet the qualifying conditions
Disclaiming the personal allowance
In practice, the personal allowances is usually given automatically to those who qualify, without a claim being required. However there are some exceptions ton this rule.
When would you want to disclaim the personal allowance?
You may want to disclaim your personal allowance in order to claim Income Tax relief on an Seed Enterprise Investment Scheme (SEIS) where your income would otherwise be entirely covered by your personal allowance.
This will allow your SEIS investment to qualify for Capital Gains Tax (CGT) disposal relief when the shares are sold. Gains on the disposal of qualifying SEIS shares, after three years, are exempt from CGT provided that Income Tax relief was given on the original investment.
However where Income Tax relief was not given on the entire SEIS subscription, the CGT exemption is restricted pro-rata, unless full Income Tax relief was not available simply because your Income Tax liability was too low.
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