Abolition of starting rate of IT from 2008-09

Abolition of starting rate of IT from 2008-09

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Paragraph 9 of BN01 (2007 budget notes) states

"...Finance Bill 2008 will remove the starting rate of tax from earned income and pensions. It will continue to be available for savings income and capital gains. There are no changes to the rates applicable to dividends."

Does anyone know what happens in relation to other sources that are neither earnings, nor pensions, nor savings income, nor Capital gains, nor dividends?

Income from property springs to mind as the most obvious example. There may be others. Presumably we will have to wait until the publication of FA 2008, but then again, there may be some further details published somewhere?

Clint Westwood

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By AnonymousUser
07th Jun 2007 09:01

I tend to agree, Paul
The confusion (if any) arises in that just because an income source does NOT fall within the definition of savings income, that does NOT mean that it DOES fall within the definition of "earnings and pensions income" (on which the starting rate band is to be abolished, if the BN is to be taken verbatim).

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By barryhallam
05th Jun 2007 15:37

The Same Question

I posed the same question as part of this thread https://www.accountingweb.co.uk/cgi-bin/item.cgi?id=168823&d=1031&h=1028&f=1026
so I would be interested to know the answer. I suspect it is that rental income and "other" income will continue to have the starting rate available but it would be nice to see it confirmed

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By AnonymousUser
05th Jun 2007 16:12

In guessing mode ...
... I would expect that anything that is currently potentially taxable at 22% will not have the starting rate band available.

So it will be interesting to see which (if either) of us turns out to be correct.

Sorry I missed the other thread

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By Paul Soper
06th Jun 2007 19:07

Definition of 'savings income'
S18 Income Tax Act 2007 (following on from S1A(1AA)) ICTA tells us what savings income is - basically interest and similar income previously chargeable under DIII including the income element of a purchased annuity, deep discounted securities and the accrued income scheme - everything else is not savings income and so will be excluded from the 10% rate. As suggested if it is currently taxed at 22% it will not be eligible for the 10% rate either.

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