24 March 2010
Income Tax 2010/2011 2009/2010 Tax on band % % £ Bands (£) 1 - 37,400** 20 20 7,480 37,401 - 150,000 40 40 45,040 over £150,000 50 40 Dividend rate* 40% taxpayer 25 25 50% taxpayer 36.11 - **there is a 10% starting rate of up to £2,440 (for 2010/2011 and 2009/2010) only for savings income. Savings income in excess of this band is taxable at the rates above (i.e. £2,441 to £37,400 at 20% etc). However non-savings income takes priority over savings income when using the £2,440 band. Capital Gains Tax (CGT) £ Annual exemption - individuals 10,100 - settlements 5,050 For assets held prior to 31 March 1982 there is a mandatory rebasing of cost to their March 1982 value. CGT is charged at 18%. 'Entrepreneurs’ relief' may apply on the disposal of trading businesses, certain shareholdings in trading companies/groups and the disposal of other capital assets associated with the disposal of the business/shares. This provides a lifetime allowance whereby the first £1 million of qualifying lifetime capital gains arising after 5 April 2008 is reduced by 4/9 i.e. an effective CGT rate of 10% (ignoring losses and the annual exempt amount). From 6 April 2010 the lifetime limit increases to £2 million. Inheritance Tax (IHT) Transfers made on or after 6 April 2009 Rate £1 - £325,000* nil Over £325,000 40% on death *the unused percentage of the nil rate band following the death of the first spouse can be claimed by the executors of the surviving spouse to give them up to a maximum of two nil rate bands to use on the second death. Lifetime gifts Most lifetime gifts are exempt from IHT if donor survives seven years. Some gifts including those into and out of most trusts will be taxed at half the death rates. Tax charge on gifts within seven years of death as set out below: Years before death 0-3 3-4 4-5 5-6 6-7 % of death rates 100 80 60 40 20 Other exemptions Small gifts: £250 per donee. Annual gifts: £3,000 per donor. In consideration of marriage: parent £5,000; grandparent, remoter ancestor or party to marriage £2,500; other £1,000. Corporation Tax Rates Taxable profits £1 - £300,000 21%** £300,001 - £1,500,000* 29.75% over £1,500,000 28% * marginal relief fraction 7/400 **to increase to 22% from 1 April 2011 1.1.2010 1.12.2008 Standard rate 17.5% 15% VAT fraction of gross price 7/47 3/23 Reduced rate 5% 5% Annual turnover limits From From 1.4.2010 1.5.2009 - registration £70,000 £68,000 - deregistration £68,000 £66,000 HMRC Interest Rates Income tax/capital gains tax/corporation tax/inheritance tax - late paid tax 3.0% - overpaid tax 0.5% Corporation tax quarterly instalment payments - underpaid instalments 1.5% - overpaid instalments 0.5% VAT - on under declaration 3.0% - on official errors 0.5% Value of property Residential Non-residential £ % % 1 - 125,000 nil nil 125,001 - 150,000 1*# nil 150,001 - 250,000 1# 1 250,001 - 500,000 3 3 over 500,000 4 4 *nil in disadvantaged areas. #nil for first time buyers for two years starting from 25 March 2010 Pre 1 January 2010 nil on residential property up to £175,000
*the higher rate for dividends is based on a dividend grossed up by a notional tax credit of 10%. For 50% taxpayers the higher rate is 42.5% and for 40% taxpayers it is 32.5% this means that further tax is payable at 36.11% of the net dividend received for 50% taxpayers and 25% for 40% taxpayers.