Law firms may rejig their business structures in an effort to find a loophool in a new tax burden for high earners in the UK.
London’s Magic Circle lawyers will see a sharp rise in personal taxation thanks to chancellor Alistair Darling’s announcement today of a new 50 per cent income tax rate to bolster the economy.
The new rate will apply to earnings in excess of £150,000 ($308,000), and will be introduced in April next year. And from April next year, personal tax allowances will be withdrawn from those who make £100,000 or more.
Law firm Smith & Williamson’s Giles Murphy told Legal Week the proposed new top rate of incomes tax will “act as a deterrent for lawyers to stay in the country”. Under the new rules, a partners earning around £1m would pay in excess of £50,000 of additional tax a year.
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