Budget 2009 summary
The 2009 Budget contained the following announcements:
- 50% income tax rate for all income over £150,000 from April 2010.
- Top dividend rate to increase to 42.5%.
- Personal allowance to be withdrawn for individuals earning more than £100,000, on a phased basis so that there will be a £1 reduction in allowance for every £2 of income earned above this level. This will mean that there will be no personal allowances for incomes over £112,950.
- Higher rate tax relief on pension contributions to be restricted from April 2011 for those with incomes over £150,000, and those with incomes over £180,000 will only receive basic rate relief on pension contributions. In addition, anti forestalling provisions have been introduced so that front loading of pensions in advance of April 2011 may not benefit from increased relief where the amounts contributed are significantly in excess of amounts that were being contributed. The provisions are very detailed and it will be important to review pensions contributions carefully to ensure maximum relief is obtained on contributions made between now and April 2011.
- Capital gains tax set at a flat rate of 18%.
