The Income Tax (Indexation of Qualifying Care Relief Amounts) Order 2025
Introduction
On January 21, 2025, the UK government issued a new order titled “The Income Tax (Indexation of Qualifying Care Relief Amounts) Order 2025.” This order indexes the qualifying care relief amounts for the 2025-2026 tax year, ensuring that they remain in line with inflation.
Background
Qualifying care relief is a tax relief that allows individuals to reduce their income tax liability if they incur expenses related to caring for a disabled person. These expenses can include the cost of care home fees, nursing care, and other related expenses.
Key Provisions
The Income Tax (Indexation of Qualifying Care Relief Amounts) Order 2025 contains two key provisions:
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Indexation of maximum amounts: The maximum amounts of qualifying care relief that individuals can claim have been indexed in line with inflation using the Consumer Prices Index (CPI). These maximum amounts are as follows:
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For children under 16: £12,250
- For people aged 16 to 64: £10,250
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For people aged 65 and over: £12,250
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Indexation of income limits: The income limits that determine eligibility for qualifying care relief have also been indexed in line with CPI. These income limits are as follows:
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For people with incomes up to £125,000: Full relief available
- For people with incomes between £125,000 and £150,000: Relief is phased out
- For people with incomes over £150,000: No relief available
Impact
The Income Tax (Indexation of Qualifying Care Relief Amounts) Order 2025 ensures that qualifying care relief remains a valuable tax break for individuals who incur expenses related to caring for disabled persons. The indexation of the maximum amounts and income limits will help to maintain the purchasing power of this relief, protecting it from the effects of inflation.
Conclusion
The Income Tax (Indexation of Qualifying Care Relief Amounts) Order 2025 is a welcome step by the UK government to support individuals who provide care for disabled persons. The indexation of the maximum amounts and income limits will ensure that this tax relief remains effective in helping to cover the costs of care and support individuals who are caring for their loved ones.
The Income Tax (Indexation of Qualifying Care Relief Amounts) Order 2025
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UK New Legislation a new article on 2025-01-21 13:07 titled “The Income Tax (Indexation of Qualifying Care Relief Amounts) Order 2025”. Please write a detailed article on this news item, including any relevant information. Answers should be in English.
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