Specialist Tax News

Avoid The Personal Allowance Trap

From 6 April 2010 there is a gradual withdrawal of the personal allowance if your taxable income exceeds £100,000. This is via a reduction of £1 of allowance for every £2 of excess taxable income, and it means that if your 2010/11 taxable income is within the range of £100,000 to £112,950 you will amazingly suffer tax at the staggering rate of 60%! The marginal income tax rates are as follows:

Taxable income Marginal rate
£100,000 to £112,950 60%
£112,951 to £149,999 40%
£150,000 + 50%

You may well consider this to be outrageous, and together we should be able to find an alternative strategy if your  taxable income is likely to be within that range.   

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