Happy New Tax Year

Author: Proposito Team
Published: 6th April 2010

The first day of the new tax year has ushered in many more changes than usual. Today heralds huge changes to the tax landscape for high earners, an increase to the age at which it is possible to take benefits from a personal pension and the start of a phased increase in state pension age for women.  As if those weren’t enough changes to be getting used to, Mr Brown has just announced that the general election will be held on 6th May 2010.  We should know by lunchtime on 7th May 2010 whether these changes are just the tip of the iceberg…

Summary of Changes effective from 6th April 2010

  • Removal of personal allowance by £1 for every £2 of income in excess of £100,000.
  • New top rate of income tax of 50% on income over £150,000.  Corresponding top rate of tax on dividend income is 42.5%
  • Minimum age to take benefits from personal pension is now 55.
  • State pension age gradually increasing from women from 60 to 65 over the next 10 years.

But there is some good news for investors – the ISA allowance of £10,200 has been extended to the under 50’s and the ISA allowance will now be indexed in line with RPI.