News
Don’t let the Emergency Budget leave you financially worse off
27/07/2010
Change of Government, change of priorities. As part of its Emergency Budget announcement in June, the newly-formed Conservative-Liberal Democrat coalition unveiled the biggest package of tax increases and spending cuts in a generation – aimed at tackling the UK’s gaping Budget deficit.
The Office of National Statistics has calculated that the £4 trillion debt works out at £65,000 per person*, so it’s no surprise the Emergency Budget features tough measures which will affect us all. However, it doesn’t mean you have to accept your wallet will feel lighter as a result.
People who have taxable income and capital gains over £37,400 per year must now pay Capital Gains Tax at 28% – a 10% increase
This change makes it even more vital you protect as much of your savings as possible within an ISA wrapper. Since April 2010, each person has a £10,200 allowance for investing tax-free in an ISA, are you making the most of yours? Click here to read the benefits of ISA investing.
VAT to rise from 17.5% to 20% from 4 January 2011
With inflation also running at 3.2%** – well above the Bank of England’s 2% target – it’s clear the cost of living is rising at a faster rate than the returns on traditional bank and building society savings accounts. By undertaking a review of your investments and savings, you can beat the VAT increase. Click here for more information on how SFS could help you.
Inheritance Tax threshold levels frozen for at least four years
The Conservatives had pledged to increase the threshold as part of its General Election campaign, stating “only millionaires should pay Inheritance Tax”^. But upon forming the coalition Government, it agreed to freeze the limits for at least the next four years.
If the value of your estate adds up to more than £325,000 (£650,000 if married or in a civil partnership), a massive 40% of what you plan to leave behind for loved ones could be taken by the Taxman.
However, through obtaining Inheritance Tax Planning advice you can reduce or even eliminate your liability altogether, and you may still be able to retain control of your investments and estate. Click here for more information on Inheritance Tax Planning.
* Source: Daily Mail, 14 July 2010
** Source: Bank of England, 13 July 2010
^ Source: Daily Telegraph, 22 June 2010
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