24th March 2010 BUDGET PROPOSALS
AND CHANGES FOR 2010/2011 previously announced
(Subject to details in the Finance Bill)
Ellis Atkins have taken all due care in the presentation of these notes. No responsibility for loss occasioned to any person or company acting or refraining from action as a result of any material in these notes can be accepted by Ellis Atkins, its partners or staff. Please contact us or your own professional advisor for advice specific to your circumstances.

10.1 Personal Pensions

From 6th April 2010, the maximum level of earnings for which pension provision may be made with tax relief increases from £245,000 to £255,000. This will be frozen at £255,000 for six years.

The lifetime allowance for total tax-approved pension savings increases from £1,750,000 in 2009/2010 to £1,800,000 in 2010/2011. This limit will also be frozen for six years.

From 2011/2012 people with income of £150,000 or more will have tax relief restricted down to the 20% basic rate on pension savings above their normal regular pattern of savings.

10.2 Stamp Duty Land Tax

For residential property transactions the 1% rate threshold was temporarily increased from £125,000 to £175,000 on 3rd September 2008. This reverted back to £125,000 on 1st January 2010. The 3% and 4% rates and thresholds are unchanged at £250,000 and £500,000 respectively.

A new 5% rate is introduced for residential properties worth more than £1 million from 6th April 2011.

First time home buyers will pay no stamp duty on properties worth up to £250,000 for the next two years.

10.3 Enterprise Investment Scheme (EIS)

The annual investment limit remains at £500,000.

10.4 Venture Capital Trusts (VCTs)

The annual investment limit remains at £200,000 and the income tax relief remains at 30%. VCT investors must hold their shares for a minimum period of 5 years.

10.5 ISAs

From 2010/2011 the maximum limit of investment is increased from £7,200 to £10,200, of which £5,100 can be invested in cash.

From 2011/2012 the ISA limits will be increased in line with the Retail Price Index.

10.6 Employer Supported Childcare

Employees can continue to receive up to £55 a week with an approved childcarer, free of tax and National Insurance. The requirement for employer supported childcare to be made available to all employees in order to qualify, is withdrawn.

10.7 Pensioners

The basic state pension is increased by 2.5% to £97.65 per week.

The winter fuel allowance remains at £250 per household for those aged over 60 (rising to 65 incrementally between 2010 and 2020 in line with the increase in women’s state pension age) and £400 for those aged over 80.

From October 2009 the first £10,000 of savings held by pensioners will be disregarded when assessing their entitlement to Pension Credit, Housing and Council Tax Benefit (previously £6,000).