Budget 2009 – Personal Tax
Personal Allowances 2009-2010
These remain as announced in the Pre-Budget report November 2008. From 6 April 2009 the income tax personal and age related allowances were increased to:
Age under 65 – £6,475
Age 65 to 74 – £9,490
Age 75 and over – £9,640
The income limit for aged related allowances (over 65’s) is increased to £22,900.
Blind person’s allowance increased to £1,890.
Personal Allowances 2010-2011
The basic personal allowance will be reduced for taxpayers who earn more than £100,000 per annum. Where an individual’s income is above £100,000 the basic personal allowance will be reduced by £1 for every £2 their income exceeds £100,000. For incomes above £150,000 there will be no personal allowance.
Income Tax Rates 2009-2010
These also remain as announced in the Pre-Budget report November 2008. From 6 April 2009 the income tax rates became:
Starting savings rate 10%* – £0 to £2,440
Basic rate 20% – £0 to £37,400
Higher rate 40% – over £37,400
* There is a 10p starting rate for savings only. If an individual’s non savings taxable income exceeds the starting rate limit, the 10p starting rate for savings will not be available for savings income.
New 50% Income Tax Rate from 2010-2011
From 6 April 2010 a new income tax rate of 50% will be applied to taxable income in excess of £150,000.
Capital Gains Tax 2009-2010
The annual exempt amount for individuals is £10,100 (and for most trustees £5,050). The rate of Capital Gains Tax remains at 18%.
Inheritance Tax 2009-2010
The individual IHT allowance is increased to £325,000.
Pensioners Taxback Campaign
From autumn 2009 HM Revenue & Customs will be targeting pensioners who receive the Pension Credit to help them reclaim tax they may have paid in error from bank or building society interest they have received.
The ISA investment limit for people aged 50 or over is increased from £7,200 to £10,200 (The maximum cash element is increased from £3,000 to £5,100)
The investment limits are increased to the same level for all age groups.