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Personal tax changes coming

May 2010

The first “emergency” Budget of the new Conservative/LibDem regime will be presented to Parliament by George Osborne on Tuesday 22 June 2010.

What changes can we expect that will affect our personal tax position?

Capital Gains Tax - It is likely that one of the more controversial changes will be to treat disposals of non-business assets, second homes, rental properties, share portfolios, as taxable at the individual owner’s top rate of tax. Potentially at 40% or even 50%!

There is also speculation that the annual exemption is to be lowered from £10,100 to £2,000.

Income tax allowances - The LibDems were keen to increase everyone’s personal allowance to £10,000. It would appear that this is still a long term goal of the coalition although the increase from current levels will probably be introduced on a staggered basis over the term of the new Parliament.

VAT - One of the less contentious ways of raising additional revenue is for the Government to increase the standard rate of VAT. The likely increase is from the present 17.5% to 20%.