BUDGET 2010
This year the Winter Fuel Payment will remain at £250 for households with someone over pension age and £400 for households with someone aged 80 or more. It was due to revert to its previous levels of £200 and £300. The qualifying date for the payment will rise in line with female pension age. To qualify in winter 2010/11 you must be 60 on 5 July 2010 or earlier. It is unlikely a future Government would make any change.
Stamp Duty Land Tax is scrapped for first time buyers buying a home for £250,000 or less. The rate of tax is normally 1% for homes sold between £125,001 to £250,000. That will save a first time buyer between £1255 (it’s rounded up) and £2500. The change begins at once and will apply to all deals where completion happens on 25 March 2010 or later. The Conservatives support this change.
The definition of first time buyer is very strict – no-one buying the property or a share in it must ever have bought all or part of a residential home (including a houseboat or mobile home) anywhere in the world. In 2010/11 the tax will remain at 3% of the price on homes sold between £250,001 to £500,000 and 4% above that.
Stamp Duty Land Tax will rise to 5% (from the current rate of 4%) on homes sold for more than £1 million from April 2011. That would raise the tax on a £2 million home from £80,000 to £100,000. The Conservatives say reversing this new rate of tax will not be a priority if they win the election.
Vehicle Excise Duty – car tax – will rise from 1 April for vehicles in band G or above and those above 1549cc. It will fall for vehicles in band E or below.
From April 2011 people aged 60 or more will be able to claim working tax credits if they work at least 16 hours a week. At the moment the limit is normally 30 hours a week.
The inheritance tax threshold will remain frozen at £325,000 right up to 2014/15. The Conservatives have promised to raise it to £1 million at some time in the next Parliament but it won’t be an early priority.
The Annual Investment Allowance for small businesses (including self-employed people) will double from April 2010 to £100,000. Any capital expenditure within that limit can be offset against that year’s tax in full. The Conservatives want to end this allowance and reduce corporation tax.
The maximum annual amount you can pay into your pension will rise from £245,000 to £255,000 in 2010/11. The maximum size of your pension pot from a lifetime of contributions will rise from £1.75 million to £1.8 million. Both amounts will remain frozen at those levels until the end of 2015/16. It is unlikely this change will be reversed.
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