| The main individual tax measures announced in today’s UK Budget are summarised below:
1. The tax-free personal allowance in 2012/13 is £8,105, increasing in 2013/14 to £9,205. 2. The higher rate 40% tax threshold is £42,475 in 2012/13, reducing in 2013/14 to £41,450. 3. The additional 50% tax rate for earnings above £150,000 remains at 50% for 2012/13 but reduces to 45% in 2013/14. 4. The main rate of income tax remains at 20%. 5. Legislation will be introduced to cap pension income tax reliefs from 6 April 2013. The cap will apply only to reliefs which are currently unlimited. For anyone seeking to claim more than £50,000 in reliefs, a cap will be set at 25 per cent of income (or £50,000, whichever is greater). Draft legislation will be published for consultation later this year. 6. New measures are introduced effective 22/3/12 to clamp down on stamp duty land tax (SDLT) avoidance through the use of companies to purchase UK proprty. A new 7% rate of duty is also introduced for properties of £2m and above. 7. A statutory residence test will be legislated in Finance Bill 2013 and take effect from 6 April 2013, to allow further time to finalise the detail of the test. 8. Time Apportionment: the Government will consult on reforming the time apportionment rules in the chargeable event gain regime that reflect a policyholder’s period of residence outside the UK. This will potentially impact on life insurance bonds, capital redemption bonds and life annuities. Any legislation will be in the Finance Bill 2013. 9. Life insurance: Qualifying Policies – limits will be introduced to the premiums that can be paid into qualifying life insurance policies with effect from 6 April 2013. Policies issued on or after this date will only be Qualifying Policies where the premiums payable for an individual into a policy or policies do not exceed £3,600 each year. Transitional provisions will also apply to qualifying policies issued on or after 21 March 2012 and before 6 April 2013, and before 21 March 2012 where certain variations are made after this date. This measure will be the subject of formal consultation with legislation to be introduced in Finance Bill 2013. 10. General anti-abuse rule (GAAR) – a GAAR targeted at artificial and abusive tax avoidance schemes will be introduced . The Government will consult on new draft legislation and the development of full explanatory guidance in summer 2012 with a view to introducing legislation in Finance Bill 2013 |
