Allowances stuck in a time warp

Back in 1975, the Bay City Rollers had a number one hit with Bye Bye Baby, and West Ham won the FA cup.

That was also the year when the limit of £5,000 was set for gifts to children on their marriage that were exempt from inheritance tax. The amount has stayed the same ever since but if it had been increased in line with inflation, says the Sunday Times, it would now be £37,500, which would actually provide a useful contribution to the start of married life. Other allowances that have stayed frozen include the tax-free redundancy limit at £30,000 (1988 – should now be £71,800) and the annual gift allowance for inheritance tax at £3,000 per year (1981 – should now be £10,000).

Previous campaigns for increases in these allowances have fallen on deaf ears in the Treasury and we do not expect Mr Osborne to be any more generous than his predecessors.