Subscribe to our monthly e-newsletter.

• 
• 
• 
• 

Personal Tax post June Budget

July 2010

We have highlighted three changes announced by George Osborne in his recent Budget.

1. Ending requirement to buy an annuity - If you have a pension fund there is an ultimate requirement to surrender the fund for receipt of an annuity. At present you have to do this before you reach age 75. The Government are aiming to scrap this requirement. Detailed rules will be published next year and in the meantime transitional rules will apply that will allow an extention to age 77 years.
2. Capital Gains Tax - rate changes - From midnight 22 June 2010 the basic rate of CGT is increased from 18% to 28%. The increase will apply when your income and taxable gains exceed the basic rate income tax band, presently £37,400. The 28% rate will only apply to the gains that exceed the £37,400 limit. Trustees will pay 28% on all gains.
3. Capital Gains Tax - Entrepreneurs' Relief - This relief allows gains on the sale of certain qualifying assets to be taxed at the reduced rate of 10%. This relief has not been withdrawn. Surprisingly, for qualifying gains made after 22 June 2010, the lifetime gains that can be covered by this relief have been increased from £2m to £5m.

Finally a word of caution. Details published by HMRC following the Budget state that CGT rates for 2011-12 will be decided in the 2011 Budget. There may be further CGT rate rises in the pipeline!