From 2015-16, age related tax allowance has been abolished for anyone born on or after 6th April 1938. If you were born before this date you will usually get a slightly higher allowance than those born afterwards, as for the the latter the standard 'personal allowance' is used..
Personal Allowance (Born after 6th April 1938)
The standard allowance varies depending on your income, but most people having a basic tax-free allowance of £10,600 for the tax year 2015-16. For the 2016-17 year, this allowance will rise to £11,000. For more information, please see our guide on personal tax allowances
Born before 6th April 1938
You will usually get a higher allowance if you were born before 6th April 1938. The breakdown is as follows:
£0 - £27,699
£27,700 - £27,819
£10,660 (allowance goes down by £1 for every £2 that your adjusted net income is over £27,700
£27,820 - £100,000
Personal allowance diminishes by £1 for every £2 that your net adjusted income is over £100,000. This means if your income is £121,000 or above, your personal allowance is £0.
Regardless of when you were born, the same rules apply in regards to what's classed as 'taxable income'. Your taxable income will include any salary you still receive, taxable pensions and trusts, capital gains, and any other funds you're generating such as rent from other properties. As the table above highlights, your tax allowance will only be higher in instances where you don't surpass certain thresholds. For example if your taxable income is more than £121,000 you will lose your entire personal allowance.
Claiming your age-related allowance
If you were born before the 6th April 1938, you can claim your allowance by filling in form P161. On this you will need to detail your pension and other sources of income, in order for HMRC to be able to calculate whether or not you qualify for the extended rate. If you have applied previously, and was refused due to your income being to high, you are welcome to re-apply if there has been a change in your financial circumstances.
Age-related allowances being phased out
The higher allowance used to be applicable to anyone born before 6th April 1948, but this was frozen by the government in 2013. However, it is intended that the personal allowance will replace age-related allowances completely over the next few years. This is not necessarily a bad thing as the personal allowance is set to increase each year, meaning there will be a regularly reviewed amount for everyone regardless of when they were born.