Our new Chancellor, George Osborne has announced that there will be an Emergency Budget on Tuesday 22nd June 2010. He has increased the tension by describing it as an Emergency Budget.
The actual content of the 2010 Budget Mark Two will be announced on the day but here are some predictions.
- The personal income tax allowance will increase to around £10,000.
- VAT will go up from 17.5% to 20%.
- Employee's NIC will go up, but not employers' NIC.
- The increase in the IHT nil-rate band won't happen.
- The main rate of Corporation Tax will be cut (possibly with the abolition of the small companies' rate and of the annual investment allowance to pay for it).
- Increase in the rate of Capital Gains Tax on non-business assets - possibly from the date of the budget.
The increase in Capital Gains Tax to 20%, 40% or 50% could have a huge impact on the higher earners with in-built gains. There is a window of opportunity to gift/sell prior to 22 June 2010 to crystalise the gains under the current tax rate of 18%, however, there is a possibility that the Chancellor could back-date the new rates to 6 April 2010.
Should you like to discuss any of this in more detail please do not hesitate to contact Stephanie Dodds in our Tax Department.
