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Davina Cole comments that the Budget this week has highlighted the importance of using a Solicitor when considering making a Will.
Capital Gains Tax (CGT)
The annual exempt amount remains at £10,100 for 2010/11.
For gains arising up to and including 22nd June 2010, the rate of CGT is 18%. For gains arising on or after 23rd june 2010 the rate remains 18% for those whose total taxable income and gains are less than the income tax basic rate upper limit. For gains, including parts of gains, above that limit, the rate is 28%. Gains arising before 23rd June 2010 are not taken into account in determining the rate (or rates) at which gains arising on or after 23rd June will be charged.
The Chancellor also announced that taxpayers will be able to deduct losses and the annual exempt amount in the way which minimises the tax payable.
Entrepreneurs' Relief has until now reduced the effective rate of CGT charged on certain qualifying gains to 10%, subject to a lifetime limit. The lifetime limit was increased to £2 million with effect from 6th APril 2010.
The Chancellor announced that for gains arising on or after 23rd June 2010 the rate of CGT on gains qualifying for Entrepreneurs' Relief would be 10%, and that with effect from the same date the lifetime limit would be increased to £5 million.
The rate of CGT for trusts and personal representatives is also increased to 28%, for gains arising on or after 23rd June 2010, except where Entrepreneurs' Relief applies.
Inheritance Tax (IHT)
The IHT threshold is frozen at £325,000 from 2010/11 to 2014/15.
The rate of IHT remains 20% for lifetime transfers and 40% for death estates (including transfers within seven years before death brought back into the estate for the purpose of calculating the tax due at death).
For information regarding the above please contact Davina Cole on 01743 285868 or email on firstname.lastname@example.org
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