01 February 10
The recent pre-budget report has highlighted the following issues that may be of interest to Tax payers:
National Insurance - All rates of National Insurance will increase by 0.5% from April 2011, in addition to the 0.5% rise announced in the 2008 Pre-Budget Report. The threshold at which National Insurance becomes payable will be increased by £570.
Income Tax - Personal allowances and the higher rate threshold for 2010/11 will be frozen at 2009/10 levels. A 50% tax rate will apply to income over £150,000 from 2010/11. The higher rate of income tax threshold will be frozen in 2012/13 at the 2011/12 level.
Restriction of Pension Tax Relief - The rules introduced in Budget 2009 have been tightened so that any pension benefit provided by an employer or third party will be taken into account in calculating whether a person’s income exceeds the £150,000 threshold. Also, the anti-forestalling measures have been extended to restrict irregular pension contributions over £20,000 (or £30,000 in some circumstances) for those whose income is £130,000 or over from December 2009.
Inheritance Tax - The Inheritance Tax allowance will be frozen at £325,000 in the 2010/11 tax year. Legislation closing two Inheritance Tax avoidance schemes involving the transfer of property to a trust in which the transferor retains a future interest, and also where a person purchases an interest in a trust will in all likelihood be introduced.
If you are interested in Estate Planning Issues, please contact Nia Wharry on Tel: 01256 320 555.
