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Personal Income Tax
National Insurance Contributions
Capital Gains Tax
Stamp Duty Land Tax
Value Added Tax
Personal Income Tax
Tax rates and allowances (Table A)|
The tax rates and allowances for 2009/10 were as announced in November. The allowances generally have been increased at above the rate of inflation, and the rates of tax remain 20% and 40% (10% and 32.5% for dividend income). The effect on the income tax liability of a person with total income of £50,000 is a reduction of about £696 when compared with 2008/09. However, if this is all salary, increases in NIC amounting to £353 would reduce this saving.
In November, increases in the top rate of tax for very high earners were announced to take effect in 2011/12. They have now been brought forward to 2010/11, and the top rate will become 50% rather than 45%. The dividend rate will be 42.5%, up from the present 32.5%. These top rates will apply to people with incomes over £150,000 a year.
At the same time, for those with incomes over £100,000 a year, the personal allowance will be restricted. At present the personal allowance is relieved at the marginal rate, so it is worth 40% of £6,475, i.e. £2,590. The amount of the allowance will be reduced by £1 for every £2 of income above £100,000 until it falls to zero. The effect of this will be a marginal rate of income tax of 60% in the band of approximately £100,000 - £113,000 within which the allowance is being withdrawn.
The rates of income tax on discretionary trusts will also rise in 2010/11 to
match the top rates of income tax.
|Consider advancing income into 2009/10 to pay less tax, even if it is due earlier.|
Furnished holiday lettings
For many years, losses arising on UK furnished holiday lettings have been eligible for tax relief against other income. This will stop after 2010/11. In the meantime, losses on letting of furnished accommodation in the European Economic Area which satisfies the conditions for FHL will be eligible for relief against other income.