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Latest Individual News
* The personal allowance will be subject to
an income limit of £100,000 for all individuals (regardless
of age). Personal allowance will be reduced by £1 for every
£2 of adjusted net income above the income limit. *** Age allowances are reduced £1 for
every £2 by which income exceeds the income limit, until
it reaches the normal allowance. National Insurance The main rate of Class 1 NIC (from 6 April 2011) for employees and Class 4 (for the self-employed) will be 11% and 8% respectively, up to the upper limit of £844 per week. The additional rate of Class 1 and Class 4 NICs for higher income levels will remain at 1%. From 6th April 2011 the main NIC rates will increase by a further 1%. Inheritance Tax The (IHT) nil rate band will be frozen at its current level of £325,000 for tax year 2010/11, and the Chancellor has announced that the threshold will now be frozen at the same level until tax year 2014/15 (inclusive). Tax Credits From 6 April 2011, people aged 60 and over will qualify for Working Tax Credits if they work at least 16 hours a week. Currently those aged 60 and over have to meet additional qualifying criteria. Pension Contributions For people with income of £150,000 or over but below £180,000, tax relief on pension contributions (including the value of employer contributions for those in employment) will reduce gradually from marginal rate to basic rate as income increases. Where income is £180,000 or over, tax relief on pension contributions will be restricted to basic rate. The Lifetime Allowance of £1.8 million and Annual Allowance of £255,000 will continue to apply at these levels for a further five tax years, i.e. up to and including the tax year 2015-16. Pension & Other Payments As previously announced the state pension will increase in April 2010 by 2.5%, giving a basic amount of £97.65 p.w. Pension credit will be available to ensure no single pensioner need live on less than £132.60 p.w. Child and disability benefit will rise by 1.5%. ISAs From 6th April 2010 the annual Individual Savings Account (ISA) limit for every adult is increased to £10,200 of which up to 50% can be saved in cash. These higher limits also currently apply to individuals aged over 50. Capital Gains Tax The first £10,100 of gains continue to be exempt from the 18% CGT charge. Some good news for business owners, as the lifetime limit for Entrepreneurs’ Relief has been increased to £2m of qualifying gains, to be taxed at an effective rate of 10%. Furnished Holiday Lettings The Chancellor has confirmed the Finance Bill 2010 will withdraw the special rules for furnished holiday lettings (FHL) from 6th April 2010. This will mean the tax treatment of FHL businesses will be the same as for other property businesses. Stamp Duty There will be a 2-year stamp duty relief (from 25th March 2010) on purchases of up to £250,000 for first time buyers, but purchasers of expensive properties after 5th April 2011 will have to pay a 5% rate where the transaction value exceeds £1m. The rate of 4% continues to apply to purchases over £500,000. This budget summary is for general information purposes only. You should seek further specific professional advice before taking any action on the basis of the contents of this newsletter. |
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