Budget 2013 - Key points for individuals
Date published: 21 March 2013
The taxation of individuals has been through many fundamental changes over the last few years and Budget 2013 saw yet another raft of changes. Changes in tax rates and reliefs (especially for pension contributions) mean that the timing of income continues to be important in managing the overall effectiveness of an individual’s tax and financial affairs, say RSM Tenon.
From 6 April 2013 there will be the following:
- A reduction in the top rate of tax from 50% to 45%
- A cap on certain tax reliefs at £50,000 (or 25% of income)
- Age allowance frozen as 2012/13 rates
- The introduction of the statutory residence test from 6 April 2013
- CGT allowance on SEIS investments
From April 2014, the following proposals have been announced:
- An increase in the personal allowance to £10,000
- A reduction in tax relief on pension contributions and limit in lifetime allowance
Top Budget tips for individuals:
- Maximise pension contributions in 2013/14 as the limits reduce from April 2014
- Consider how the reduction in the top rate of tax from 50% to 45% from April 2013 can reduce your overall tax liability especially with regard to the timing of dividend payments
- Consider investment through SEIS as a tax efficient vehicle
- Maximise ISA allowances
- Review whether caught by the limitation on IHT relief on debts as it’s wide ranging and could affect many businesses where loans are secured on non-business property or inbound finance
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