22nd April 2009 BUDGET PROPOSALS
AND CHANGES FOR 2009/2010 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 2009, the maximum level of earnings for which pension provision may be made with tax relief increases from £235,000 to £245,000.

The lifetime allowance for total tax-approved pension savings increases from £1,650,000 in 2008/2009 to £1,750,000 in 2009/2010.

From 2011/2012 people with income of £150,000 or more will have tax relief restricted 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 will revert back to £125,000 on 1st January 2010. The 3% and 4% rates and thresholds are unchanged at £250,000 and £500,000 respectively.

10.3 Enterprise Investment Scheme (EIS)

The annual investment limit remains at £500,000.

For investments made on or after 22nd April 2009, to qualify for EIS relief 100% of money raised from share subscriptions must be used in a qualifying activity within 2 years. (Previously 80% within 1 year was required).

Also income tax relief may be carried back to the previous year on 100% of an investment made on or after 22nd April 2009. (Previously the carry back was restricted to 50% of investments made before 6th October, to a maximum of £50,000).

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

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.

From 6th October 2009 those aged 50 and over will have the limits increased to £10,200 of which £5,100 can be saved in cash. The increased limits will then be made available to all investors from 6th April 2010.

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.

10.5 Pensioners

The previous year’s winter fuel allowance “one-off” increase from £200 to £250 per household for those aged over 60 and from £300 to £400 for those aged over 80, has been extended to this year.

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).