Budget Summary June 2010

Please find below our Budget summary covering the key tax issues in George Osborne’s first Budget. The June Budget had been characterised as ‘the unavoidable Budget’ and the ‘emergency Budget’ and contained a number of very important announcements about tax.

These included:

• The increase in the rate of VAT from 17.5% to 20% to take effect in the new year.
• The increase in the personal allowance in the tax year 2011/12.
• The immediate increase in the rate of capital gains tax for higher rate income tax payers from 18% to 28%.
• The annual CGT allowance of £10,100 stays the same for this tax year but will increase in line with inflation year on year.
• The rise in entrepreneurs’ relief for capital gains tax from £2 million to £5 million.
• The progressive cuts in the rates of corporation tax over the next four years, financed by cuts to capital allowances.
• The abolition of the effective requirement to annuitise pensions at age 75 and the prospect of changes to higher rate tax relief on pension contributions.

We hope this summary proves useful.

Best regards

Duncan