Personal Allowances 2009-10

These remain as announced in the Pre-Budget report November 2008. From the 6 April 2009 the income tax personal and age related allowances are increased to:

Age under 65 – £6,475
Age 65 to 74 – £9,490
Age 75 and over – £9,640

The income limit for aged related allowances (over 65’s) is increased to £22,900.

Blind person’s allowance increased to £1,890.

Personal Allowances 2010-11

The basic personal allowance will be reduced for taxpayers who earn more than £100,000 per annum.

Where an individual’s income is above £100,000 the basic personal allowance will be reduced by £1 for every £2 their income exceeds £100,000.

Income Tax Rates 2009-10

Starting savings rate 10%* – £0 to £2,440

Basic rate 20% – £0 to £37,400

Higher rate 40% – Over £37,400

* There is a 10p starting rate for savings only. If an individual’s non savings taxable income exceeds the starting rate limit, the 10p starting rate for savings will not be available for savings income.

New 50% Income Tax Rates from 2010-11

From 6 April 2010 a new income tax rate of 50% will be applied to taxable income in excess of £150,000.

Capital Gains Tax 2009-10

The annual exempt amount for individuals is £10,100 (and for most trustees £5,050)

Inheritance Tax 2009-10

The individual IHT allowance is increased to £325,000.

Pensioners Taxback Campaign

From autumn 2009 HM Revenue & Customs will be targeting pensioners who receive the Pension Credit to help them reclaim tax they may have paid in error from bank or building society interest they have received.

ISA’s

2009-10 The ISA limit is increased to £10,200 (up to £5,100 can be saved in cash) restricted to people aged 50 or over.

2010-11 The limit is increased to the same level for all age groups.

Pensions – limiting tax relief at higher rates

From 6 April 2011 the Government intends to restrict tax relief for individuals with an annual income of £150,000 or more. Relief will be withdrawn gradually so that taxpayers earning over £180,000 will effectively achieve a 20% tax deduction, the same as a basic rate tax payer.

Additionally, from 22 April 2009, if the following conditions apply:

1. Your income is over £150,000

2. You make additional contributions in excess of your existing ongoing contributions, and

3. Your total pension contributions in the year exceed £20,000 (including contributions made by the employer).

Then any higher rate tax advantage, on additional contributions above the £20,000 limit, will be subject to a special annual allowance tax charge that will recover tax relief given at above basic rate.

Excise Duty increases

Alcohol Duty – From midnight 22 April alcohol duty will rise by 2%, equivalent to:

1p on a pint of beer
13p on a 75cl bottle of spirits
4p on a 75cl bottle of wine

Tobacco Duty – After 6pm 22 April tobacco duty will rise by 2% which will add 7p to a pack of 20 cigarettes.

Fuel Increases – Duty increases will add 2 pence per litre to the cost of unleaded petrol and diesel from 1 September 2009.

Stamp Duty Land Tax

The present exemption from SDLT of residential property sales up to £175,000 is to be extended to 31 December 2009. After this date the SDLT threshold will revert to £125,000 (£150,000 in disadvantaged areas).

The half-yearly survey is an in-depth analysis of service provision by 21 companies.

Topping the bill is relative newcomer and specialist annuity and equity release provider, Just Retirement.

Skandia take second place whilst Legal & General has moved up four places to third spot.

Friends Provident and Standard Life are the non-movers holding steady in their respective fourth and fifth places since the last survey in August 2007. AXA placed bottom again.

Sesame Sales & Marketing Director, Stephen Young is encouraged by responses from providers to suggestions for potential service improvements: “We have been sharing the findings to help them identify areas for improvement…it is possible to make a real difference to advisers’ ability to run efficient businesses that deliver a professional service to their clients.”

Treating Customers Fairly is the linch-pin of the Financial Services Authority’s principle-based approach to regulation and is this year’s industry watchword for advisers and providers alike.

The controversial “Entrepreneurs Relief” will not be tracked by the Revenue and Customs and they decided not to keep records stating that “It would not be the best use of our resources.”

The relief is spread across a persons lifetime and allows an individual to make up to £1 million with a capital gains tax of just 10% from the sale of stakes in businesses of 5% or more.

Mike Warburton of accountants Grant Thornton thinks its bizarre that no records will be kept, asking “What is to stop someone claiming the relief again and again every time they sell a business.” He claims the system is wide open to abuse, claiming “It just shows how ill thought out by the treasury it has been.”