Baxter Fensham Limited Financial Planners - Financial Planners, Wealth Managers, Tax Planners

Last November’s Pre Budget Report gave us no real indication of the tough provisions announced in the Spring Budget, not least the removal of higher rate tax relief for pension contributions, which wasn’t mentioned at all. Any original proposals will also be introduced a year earlier.

The personal income tax allowance (£6,475 in 2009/10) will be withdrawn at the rate of £1 for every £2 of income over £100,000 from 2010/11.

There will be a top rate of income tax for 2010/11 of 50% (42.5%on dividends)
for individuals with incomes of more than £150,000. The rate applicable to trusts
will also rise to 50% (42.5% on dividends) from 6 April 2010.

ISA limits will be raised to £10,200 (£5,100 for cash deposits) in 2009/10 for
anyone aged 50 or more. The higher limits apply to all investors from 6 April 2010.

Tax relief on pension contributions will be restricted to the basic rate for
individuals with incomes over £180,000 from 6 April 2011. Relief will be tapered
for incomes over £150,000. From 22 April 2009, only basic rate tax relief on
contributions will be available where contributions exceed the greater of £20,000
a year or the individual’s ‘normal pattern of contributions’.

For the five years from 6th April 2011, the standard lifetime allowance and annual allowance will be frozen at their 2010/11 levels of £1.8m and £255k respectively

The furnished holiday lettings rules will be repealed from 2010/11. Until then, the
rules will be extended to apply to qualifying holiday lets in other EEA countries.

The temporary reduction in the standard rate of VAT to 15% will end on 31st December 2009.

The small companies corporation tax rate will remain at 21% for the financial year
2009 as previously announced.

For broadly the next two years, businesses will be able carry back their trading
losses of up to £50,000 for three years rather than just one year.

A first year capital allowance of 40% will apply to qualifying capital expenditure if
it exceeds the £50,000 annual investment allowance in the 12 months from April
2009.

If you would like to know more about these issues or would like to consider any tax planning opportunities, please just contact Baxter Fensham Ltd.

Simon Fitton CFP

Baxter Fensham Limited is authorised and regulated by the Financial Services Authority
The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK.