So what does the budget mean for you?

A VERY brief summary of budgetary announcements made last week, and also a reminder of those already made that will take effect from 6th April:

- income tax personal allowances remain unchanged for 2010/11

- the National Insurance Lower Earnings Limit will be increased from £95 to £97

- a reminder that for those with adjusted net income over £100,000, their personal allowance will be reduced by £1 for every £2 over the limit

- a new tax rate of 50% will be applied on those earnings over £150,000

- for dividend income, the new tax rates will be 10%, 32.5% and 42.5%

- the ISA limit will increase to £10,200 from 6th April 2010, of which a maximum of £5,100 may be invested to a cash account

- from 6th April 2011 the higher rate of tax relief on pension contributions will be restricted for those with gross income over £150,000. Anti-forestalling rules apply in the interim

- consideration is being made for removing the dafault retirement age of 65, although no changes will come into place before April 2011

- inheritance tax thresholds will remain frozen at £325,000 until the end of tax year 2014/15, scrapping previously announced increases to the threshold

- first time buyers will pay no stamp duty on properties worth less than £250,000

- stamp duty on properties over £1,000,000 will increase from 4% to 5%

- to encourage greater financial inclusion, more people are to be given access to setting up bank accounts

- legislation is being introduced to provide for larger penalties for taxpayers failing to provide a full account of their income and capital gains relating to offshore investments

- capital gains tax will remain at 18%, with the annual exemption being frozen at £10,100 for 2010/11

Income tax, capital gains tax and inheritance tax solutions

Went to a very interesting seminar yesterday regarding the use of Venture Capital Trusts (VCT) and Enterprise Investment Schemes (EIS) as means by which investors can save income tax, capital gains tax and inheritance tax.

Not for the faint-hearted as you're investing in new emerging companies. But, for those investors with a higher appetite for risk, they might be a solution to either reclaiming tax paid in the previous year, saving tax in the current tax year.

An added benefit with an EIS is that the assets are eligible for business property relief. Therefore, if they're held at the date of death and have been held for a minimum of two years in the previous five, although classed as within your estate, they are currently taxed at 0%. So, for those investors thinking they have to survive seven years for any IHT planning, this might be a solution?