A tax rise triple whammy is set to see high-earners pay £3,800 more from next year, according to new analysis.
Higher rates of capital gains tax, lower dividends tax allowances and frozen income tax thresholds will most affect those earning £100,000 with a modest investment portfolio, stockbroker Interactive Investor has said.
The Telegraph reports a more average worker earning £35,000 a year will pay £1,200 in additional taxes, while those on £50,000 will be hit for an extra £1,800.
Under the previous Tory government, the capital gains allowance was slashed from £6,000 in 2023-24 to £3,000 in April. The dividend allowance was cut from £1,000 to £500.
In her recent Budget announcement, chancellor Rachel Reeves raised the rates of capital gains tax on shares from 10% to 18% for basic-rate tax payers and from 20% to 24% for those on a higher rate.
Myron Jobson, of Interactive Investor, said the changes mean a significantly higher tax burden in the new year.
He said: “More people have been dragged into paying tax or higher rates of tax as their wages rise and cross the unchanging thresholds, commonly referred to as fiscal drag. This is despite savings from the cuts to the National Insurance rate.
“Those with investments held outside tax wrappers such as ISAs and pensions, which shield gains, dividends, and interest from tax, now face a significantly higher burden, exacerbated by the recent hikes in capital gains tax rates announced in the October Budget.”
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