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BUDGET 2012

BUDGET 2012. Phil Cook FCA CTA Tax Partner Clement Keys. Budget 2012. Personal Taxes PA’s up £630 in 2012/13 for those under 65 Further increase of £1,100 in 2013/14 Benefit withdrawn for Higher rate by reducing 40% threshold by same amount (now £34,370 from £35,000)

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BUDGET 2012

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  1. BUDGET 2012 Phil Cook FCA CTA Tax Partner Clement Keys

  2. Budget 2012 Personal Taxes • PA’s up £630 in 2012/13 for those under 65 • Further increase of £1,100 in 2013/14 • Benefit withdrawn for Higher rate by reducing 40% threshold by same amount (now £34,370 from £35,000) • Age related Allowances frozen from 2012/13 • Abolished for those reaching 65 after 6.4.13

  3. Budget 2012 Personal Taxes • Higher rate remains at 40% up to £150,000 • Additional Rate reduced to 45% from 6 April 2013 for income >£150,000 • Dividend Rate for Higher Rate 32.5% (net rate = 25%) • Dividend Rate – 37.5% (net rate = 30.55%) – currently 42.5% (net 36.1%) • PA’s £1:£2 reduction for income > £100,000

  4. Budget 2012 Personal Taxes • From 7.1.13 Child Benefit Tax Charge to recoup benefit for income >£50,000. • All couples living together • Applies to highest income earner • HMRC will collect tax charge through SA or PAYE as necessary • Election possible to waive benefit • HMRC will contact in Autumn 2012

  5. Budget 2012 Personal Taxes • EIS simplification; investment limit £1million • SEIS - £100,000 relief @ 50% for small coy’s • Ceiling on unlimited IT reliefs in FB 2013 • Statutory Residence test – deferred to 6.4.13 • ISA Limit to £11,280 • Qualifying Life policy premium limit of £3,600pa

  6. Budget 2012 Capital Taxes • CGT Annual Exemption & IHT Nil Rate Band unchanged • Non-Dom spouses limit to be reviewed • D T Periodic Charges to simplified from FB 2013 • Acquired Excluded Property trusts to be charged

  7. Budget 2012 SDLT • Residential property >£2m subject to 7% SDLT • 15% charge on similar properties held by ‘Non-natural’ persons • Annual charge consultation on non-naturals • Anti-avoidance changes on property & option schemes

  8. Budget 2012 Capital Allowances • AIA down to £25,000 from £100,000 • WDA down from 20% to 18% and from 10% to 8% for the Special rate pool • Fixtures subject to S198 type election on sale • EZ allowances will be 100% on P&M • Solar Panels producing FiT payments will be Special Pool only from April 2012

  9. Budget 2012 Corporate Tax • Full rate reduced to 24% from 1.4.12 • Further reduction to 23% from 1.4.13 • Final reduction to 22% from 1.4.14 • Marginal rate becomes 25% from 1.4.12 • Small company rate unchanged

  10. Budget 2012 Other Issues • Cash Basis for small businesses • Consultation on unincorporated businesses with turnover <£77,000 from April 2013 • Anti-avoidance law • A general anti-avoidance rule recommended by the Aaronson Report in FB 2013 • Consultation on dis-incorporation

  11. Budget 2012 HMRC v PA Holdings Ltd • Dividends v Bonus • Artificial arrangements • Dividend waivers • Alphabet shares • Arctic Systems

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