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9 MARCH 1999 INCOME TAX AND PERSONAL SAVINGS INCOME TAX RATES The Chancellor announced that a new 1 Op rate of tax will be introduced for the new tax year. This will be followed, in April 2000, with a reduction in the basic rate of income tax from 23% to 22% Rates for 1999/2000 are: 1999/00 1998/99 Lower rate band to £1,500 £4,300 Tax rate 10% 20% Basic rate band - next £26,500 £22,800 Normal rate 23% 23% Savings income rate 20% 20% Higher rate band - over £28,000 £27,100 Tax rate 40% 40% PERSONAL ALLOWANCES Married Couples Allowance will be abolished with effect from 6 April 2000 for those under 65. MCA at the higher rates will be retained for those couples in which at least one spouse is aged 65 or more on or before 5 April 2000. Other reliefs linked to the MCA will also be abolished with effect from 6 April 2000, with the exception of relief for certain maintenance payments. Rates announced for 1999/2000 are as follows: 1999/00 1998/99 Allowances that reduce taxable income Personal allowance - under 65 4,335 4,195 -65 to 74 5,720 5,410 -75 and over 5,980 5,600 Allowances that reduce tax Married couple's allowance Tax reduction -under 65 197.00 285.00 -65 to 74 512.50 495.75 -75andover 519.50 501.75 MORTGAGE INTEREST RELIEF As expected, the Chancellor confirmed that tax relief on mortgage interest payments will be withdrawn with effect from 6 April 2000.
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