23rd March 2012

March 2012 Budget update

On 21^st March, the Chancellor presented his 2012 Budget. Our Financial Planning team have prepared a detailed analysis and summaries of the relevant facts and figures which highlight the key impacts for you and your clients.

View our dedicated Budget pages

The key impact areas are shown below.

• From April 2013, the 50% additional rate of income tax will be cut to 45% and to 37.5% from 42.5% for dividends.
• The personal income tax allowance will rise to £8,105 from April 2012 and to £9,205 from April 2013. There will also be a freeze on existing age-related allowances from 6 April 2013.
• The basic rate tax limit reduces from Â£35,000 to £34,370 for 2012/2013 and £32,245 for 2013/2014.
• The State Pension will reform into a single tier pension for future pensioners and future increases in State Pension Age will take account of increases in longevity.
• The main rate of corporation tax will be cut to 24% from next month. By 2014 it will fall to 22%.
• Qualifying policy investments will be restricted to an annual premium limit of £3,600 from 6 April 2013, with transitional rules applying from 21 March 2012. 
• The capital gains tax exemption remains frozen for 2012/2013 at £10,600.

On the inheritance tax front, the Government is consulting on a range of topics. They include increasing the exempt amount that someone living permanently in the UK can transfer to a spouse or civil partner living permanently outside the UK.

Investments