All articles by Leonie Kerswill
Leonie Kerswill
Taxing times for HNWIs and advisers
However the two main issues for many individuals remain the increase in the higher rate of tax to 50 percent and the restrictions on higher rate tax relief for pension contributions.By way of reminder, the new 50 percent tax rate (actually an effective 36.11 percent rate for dividends) for income over £150,000 ($227,019)takes effect from 6 April 2010, while higher rate tax relief for pension contributions will be withdrawn for high income individuals (defined as those individuals with more than £150,000 of gross income) from 6 April 2011.In addition, we have the forestalling provisions that will mean that many high income individuals will actually lose the benefit of higher rate tax relief on all pension contributions in excess of £20,000 made on or after Budget Day (22 April 2009).So where have wealth managers and, more importantly, their clients been left?The most obvious effect of the Budget announcements is that with a differential in tax rate between capital and income returns from next April of 32 percent many investors will be looking for investments that deliver capital, rather than income, returns