§ These increases in pension make it necessary to review the income tax age exemption—the provision which gives specially favourable tax starting points to people of 65 or over with limited incomes. I propose to follow the usual practice by raising these starting points in line with the increases in basic pensions. The single person's age exemption limit will be raised from £475 to £504 for 1971–72 and to £530 for 1972–73. and the married couple's limit from £740 to £786 for 1971–72 and to £825 for 1972–73.
§ As regards the marginal relief associated with the age exemption, the percentage figure which governs the relief has already been fixed at 47–5 per cent. for 1971–72, but in view of the very substantial increase in the exemption limits for 1972–73, I propose to make the figure 50 per cent. for that year in order to ensure that the marginal relief does not run too far up the scale.
§ Next, dependent relative allowance. It has long been the rule that the full allowance is given for maintaining a dependent relative who has only the standard National Insurance retirement pension. The dependant's income limit for the full allowance will therefore be raised from the present £260 per annum to £289 for 1971–72 and £312 for 1972–73.
§ I also propose to make a modest increase from £1,000 to £1,200 in the income limit up to which an elderly married couple can have their investment income treated for tax purposes as if it were earned. The limits for this relief—the age relief, as it is called—have hitherto been the same for single people and married couples, but I think it is reasonable to give a slight preference for the married.