Britannia Radio

Private Client Newsflash Increase in income tax rate from 40% to 50% from April 2010 The Budget has announced a 10% increase in the top rate of income tax for over £150k. Although this measure will not come into effect for another 12 months, it will have significant implications for tax planning for private clients, including: Increasing the differential between capital gains (18%) and income (50%) to 32% meaning that the structuring of new investments is crucial; encouraging cash extraction of profits / bonuses / dividends from companies ahead of 5 April 2010 to save around 10% tax; unwinding film partnerships early to avoid reversing differences taxed at 50% rather than 40% as originally envisaged; sheltering new income streams in companies to take advantage of the 22% saving between income tax (50%) and corporation tax (28%) probably by splitting capital and income sharing rights or using a finance company; post-2010 avoiding taking profits out of a company but segmenting them instead within the corporate sector for asset protection purposes; and channelling all future income into a tax year when you are non-resident. If your clients are affected by any of the issues above and you would like clear and practical advice on how to proceed, please contact: Nick Hopkin |  nicholas.hopkin@uk.pwc.com  | Tel: 07703 501 953 Dipan Shah  |  dipan.shah@uk.pwc.com  |  Tel: 07974 956 947 If you would like to unsubscribe from future Private Client Newsflashes, please click here to let us know. This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. © 2009 PricewaterhouseCoopers LLP. All rights reserved. "PricewaterhouseCoopers" refers to PricewaterhouseCoopers LLP (a limited liability partnership in the United Kingdom) or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate and independent legal entity.