Capital Gains Tax

George Osborne's budget was well received, all breathed a sigh of relief when it was stated that the Capital Gains Tax allowance would not be reduced to £2000, which was in the Liberal Democrat Manifesto.  It remains at £10,100 for this year.  In addition the 18% rate was kept for basic rate tax payers with those paying higher rate tax having to pay a rate of 28%.

For entrepreneurs, the capital gains rate of 10% was extended to the first £2000 of profit.

Income Tax

The personal allowance is to rise to £7475 for under 65 year olds from next April with the aim to raise it to £10,000 over the life of the parliament.  The top rate of 50% is to remain for the time being.

Pensions

The government have realxed the rule requiring people to buy an annuity at 75 years.  This has been increased to 77 years and will be reviewed after consultation with the industry.

The complicated rules surrounding pension contributions for high earners have been scrapped and new rules will be announced later.

State pensions are to be increased in line with earnings rather than the retail price index(rpi) with a minimum increase per annum of 2.5%

Child Trust Funds

These are to be reduced to £50 for any baby born after August 1st and will cease all together in December.  The ability for relatives to contribute to a fund for children, up to £1,200, will still be allowed until a year after the last trust fund is granted.  This will be December 31st 2011.

For further information why not download our summary.