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Private individuals

As anticipated the emergency budget contains much material that will affect individuals and their investment vehicles. The capital gains changes may not be as bad as many feared, but the revised rules are far from simple. National insurance is still set to rise for many and yet further changes to pension tax rules are in prospect. The increase in VAT to 20% in January 2011 will also hit family budgets. On the other hand there are a few crumbs of comfort for some such as the increased personal allowance and continuing reliefs for furnished holiday lettings. Further details are contained in this section.

Income tax rates, allowances and NI thresholds

The Government has announced that the rates of income tax will remain the same and the thresholds will be decided for 2011/12 at the usual time, probably in October 2010.

Capital gains tax changes

Despite the Chancellor stating that he wanted to keep the capital gains tax regime simple, and as a result he was not interested in introducing any form of indexation or taper relief, the changes announced are not so straightforward.

Further pension reform

The Government has said it will review the pension tax relief restrictions introduced in the 2010 Finance Act. The Government has suggested an annual allowance of between £30,000 and £45,000 could be a more viable solution.

A first step towards pension freedom? Interim measure deferring the requirement to buy an annuity to age 77.

The Government has announced that it will end the effective requirement for members of registered pension schemes to purchase an annuity by age 75 with effect from 6 April 2011.

Next chapter in the Furnished Holiday Lettings saga

The previous Government had announced plans to scrap the beneficial tax treatment of Furnished Holiday Lettings following the European Union statement that it was discriminatory against holiday lets in the EEA as it favoured UK properties only.

Sundry announcements affecting individuals

The Coalition Government has reaffirmed its planned review of the taxation of non domiciled individuals but without giving any indication of its current thinking.

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