Byline: IAN LOWES
IN THE weeks leading up to the emergency Budget we were warned to expect harsh measures and a period of austerity as the newly elected coalition Government was to start tackling the country's Manolo blahnik shoes pounds 156bn of public debt.
This had the potential to be a very painful budget and there is no doubt that it has hit the pockets of everybody - notably through the increase of VAT from 17.5% to 20% as from January 4, 2011.
Many of us who save and invest will have started to review our finances after the Chancellor's pronouncements.
However, for investors and buy-to-let owners, the rise in Capital Gains Tax (CGT) had been the greatest worry.
All signs pointed to the Chancellor increasing the CGT rate to reflect the level of Income Tax, ie 40-50% for higher and super-rate payers - as was hinted at in pre-Budget comments - with the possibility of the re-introduction of taper relief and all the bureaucracy that goes Manolo blahnik shoes with it.
I am pleased to see that the Chancellor has decided to implement a simpler system, keeping the rate at 18% for low-to-middle income earners and increasing it to 28% for higher rate taxpayers. I had predicted Manolo blahnik shoes a rise to 25%, so I was not too far out. This change applied from midnight, June 22.
This will bring in additional revenues for the Treasury through increased CGT and Income Tax payments, but it will hit Middle England investors far less than was hinted at - you can speculate whether this was a contrived political ploy.
I was most happy to see that not only was the annual CGT allowance retained at pounds 10,100 but it will be increased in line with inflation in future years, meaning most investors will still be able to avoid paying CGT. The Lib Dems had proposed slashing it to pounds 1,000 which would have had a serious impact on ordinary people who have saved prudently and those who have been investing in property to finance their retirement.
Higher-rate taxpayers will now have to pay the 28% but with the CGT allowance intact, which is significantly better than the 40%-50% hinted at pre Budget.
Christian louboutin shoesThis Budget will bring CGT in line with other countries but provide an incentive for the UK to keep on saving for its future.
Likewise, the extension of the 10% CGT rate for entrepreneurs from the first pounds 2m of qualifying gains to pounds 5m will be welcomed by businesses holding assets with latent capital gains.
We all knew CGT would be hiked, the question was by how much. Now we know the details, with the appropriate financial advice and the right tax planning, investors should still be able to Christian louboutin shoes maximise Christian louboutin shoes returns from investments and minimise their tax liability. Ian Lowes is managing director of Newcastle-based Lowes Financial Management