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Resources FAQ Taxation The new 50% tax rate comes into force on 6 April 2010
The new 50% tax rate comes into force on 6 April 2010 PDF Print E-mail
Friday, 16 October 2009 00:00

From 6 April 2010 there will be an additional higher rate of 50% for taxable income above £150,000. Personal allowances will also be reduced by £1 for every £2 of adjusted net income above £100,000. There’s a further sting for individuals with income of £150,000 who rely on dividends to supplement they income – their dividend income will be taxed at a new rate of 42.5% instead of the current rate of 32.5%.

H M Revenue & Customs estimates that there were 290,000 people in the UK who earned over £150,000 in 2007/08. If you are one of these people or expect to be in 2010/11, is there anything you can do to protect your hard earned income? We have summarised below some of the strategies you may wish to consider. Briefly they are as follows: 

  • Make pension contributions
  • Sacrifice some of your salary
  • Incorporate your business
  • Transfer income generating assets to your spouse
  • Convert income to capital
  • Pay contributions into your spouse's pension scheme
  • Put the maximum in tax-efficient savings schemes
  • Make charitable donations

Last Updated ( Saturday, 17 October 2009 17:34 )
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