There were no surprises in the Budget and very little of anything for the majority of individuals to get excited about.
The usual suspects – alcohol and tobacco – got hammered but that had already been announced previously.
Fuel duty down by 1p and an inflation rise in fuel prices in April 2011 has now been put back to 2012 – when you’re paying £1.40 for a litre of diesel a 1p reduction is nothing to get excited about.
Previously announced increases in Personal Allowances were confirmed as was the reduction in the band of income on which you pay basic rate Income Tax – if you’re under 65 and your income is less than £42,775 you will pay a little less tax than last year (about £200).
Inheritance Tax reduced (or has it) – a new Inheritance Tax rate of 36% will be introduced for estates where a minimum of 10% of the net estate is left to a registered charity. The current Inheritance Tax rate is 40% so this is a welcome reduction you might think.
However, as is often the case, nothing is as it seems – for example, if you leave a taxable estate of £100,000 and leave £10,000 of it to charity the new Inheritance Tax rate of 36% would be applied to the remaining £90,000 meaning that your beneficiaries receive a net amount of £57,600
Had you left to whole £100,000 to your beneficiaries and nothing to charity the Inheritance Tax rate might be higher at 40% but they are still left with a net amount of £60,000.