Britain would cut its top rate of income tax from 50 percent to 45 percent as of April 2013, British Chancellor George Osborne announced in his Budget speech to House of Commons on Wednesday.

The policy would target at people with earnings of 150,000 pounds (238,000 U.S. dollars) a year.

The current top rate of 50 percent on rich people, introduced by the Labor party in 2010, has hampered Britain's competitiveness, arousing complaints of curbing entrepreneurship, and raised only a third of the 3 billion pounds (4.74 billion dollars) expected, Osborne said.

The Chancellor said that other tax reforms and new anti-avoidance measures will ensure five times more revenue to be raised from the wealthiest people, as he defended the politically risky and highly controversial decision of cutting the top-rate income tax.

He introduced in his budget a new stamp duty of 7 percent on homes worth over 2 million pounds (3.16 million dollars) and a 15-percent stamp duty on such homes bought via companies, which will take effect right from announcement.

The government predicted the move would raise 150 million pounds (237 million dollars) in the next fiscal year, which will rise to 300 million pounds (474 million dollars) by 2016/2017.

Osborne also made clear that the threshold of income tax, which is due to rise to 8,105 pounds (12,806 dollars) next month, will increase to 9,205 pounds (14,544 dollars) from 2013, as the Chancellor emphasized helping middle-and-low-income families as a core aspect of this Budget.

The personal tax allowance lift is estimated to make 24 million people save 220 pounds (347.6 dollars) a year, according to the Treasury.