PERSONAL

Income Tax Personal Allowance to increase by £1,000 to £7,475. Basic rate threshold cut by £1,000 to £42,375.

Capital Gains Tax for higher earners rises from 18% to 28% . Annual exemption of £10,100 unchanged. However, gains will be added to income to ascertain whether individuals remain basic tax payers or not eg if income and gains exceed £43,875, CGT will be paid at 28%. Entrepreneurs Relief Lifetime limit extended to £5m from £2m, CGT rate paid by Entrepreneurs stays at 10%.

VAT to increase from 17.5% to 20% from January 4th 2011.

Tax Credits cut for households earning more than £40,000 a year

Inheritence Tax threshold is frozen at £325,000 for the next 4 years. Lifetime rates of 20% and death estate rates of 40% remain unchanged.

Furnished Holiday Lets: The previous Governments plans to limit the benefits of these have not been actioned, however the Coalition does plan to review the tax rules on this.

BUSINESS

Corporation Tax small companies rate reduced from 21% to 20%

Capital Allowances: Writing Down Allowances for plany & machinery will reduce from 20% to 18% from 1st April 2012 and from 10% to 8% for expenditure allocated to the spracial rate pool.

Annual Investment Allowance reduced from £125,000 to £25,000 from April 2012.

Please contact me to discuss any aspect of the budget you are concerned or unsure about.