mowatt financial Planning

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Mowatt Financial Planning: April 2011

Friday, 15 April 2011

Funding Long Term Care

One of the great uncertainties of later life is health and as a consequence the need for long term care. The cost of care can vary enormously depending on whether it is provided at home, or in a residential or nursing care home.

I've just written an article which considers the ways in which long term care can be funded. See Funding Long Term Care.

Wednesday, 6 April 2011

6th April - A new tax year

As it is now the 2011/12 tax year there are a number of changes which have been introduced which affect how you are taxed. I've outlined the main ones below:

Personal Allowance
This is the amount of income you can earn with out paying tax. This has increased to £7,475 (from £6,475) if you are under 65 and to £9,940 if you are aged 65 to 74 and £10,090 if you are 75 or older. So far so good.

Income Tax
There are currently 3 tax bands, 20%, 40% and 50% and the bands to which they apply have also changed. These apply to your earnings after deducting your personal allowance.

20% (£1 - £35,000)
40% (£35,001 - £150,000)
50% (over £150,000)

National Insurance Contributions
The employee contribution has increased by 1% from 6th April.

The overall impact of these changes is that you are likely to be better off if you are earning £42,475 or less whilst you will start being worse off beyond this as more earnings will be caught by the 40% tax band.

If you want to check for yourself there is a tool on to do this.

Capital Gains Tax
If you make a capital gain on an investment the annual allowance (the part of the gain exempt from tax) has risen to £10,600. Any gain above this will be taxed at 18% or 28% depending on your marginal rate.
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