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For financial advisers - compiled by our team of experts, qualified in pensions, taxation, trusts and wealth transfer.

Budget 2018 - what it means for you and your clients

29 October 2018

With no significant tax or pension changes in today’s Budget, advisers can now plan for the tax year ahead with confidence. The key planning points for financial advisers from today’s Budget, and from measures already announced, are:

Income tax

  • The personal allowance and higher rate threshold will increase earlier than expected to £12,500 and £50,000 respectively from April 2019. The income tax rates and bands for Scottish taxpayers will be announced in Scottish Budget on 12 December.
  • There are no other changes to income tax bands or allowances.

Pensions

  • The pension lifetime allowance (LTA) will rise to £1,055,000 from April 2019.
  • Reassuringly, there are no changes to pension annual allowances (AA). The standard AA remains at £40,000, the money purchase AA stays at £4,000 (with no carry forward) and there are no changes to the high income AA taper rules.

Capital gains tax

  • The capital gains tax allowance will increase by £300 to £12,000 from April 2019.

Inheritance tax

  • As expected, the IHT nil rate band will remain frozen at £325,000 until April 2021.
  • The residence nil rate band will increase from £125,000 to £150,000 from April 2019, allowing some couples to leave up to £950,000 to future generations free of IHT.

Trust taxation

  • There will be a consultation to consider the simplification and fairness of trust taxation.
  • The existing IHT regime for trusts is notoriously complex and any attempt to simplify it is extremely welcome. Removing the complexity of trust tax charges would allow advisers to concentrate on the benefits a trust can offer their clients to control their affairs, without them being fearful of charges they don’t fully understand.

ISAs

  • Annual ISA limits stay at £20,000 per person, with no reduction in the range of ISA options available to meet different needs.

Issued by a member of abrdn group, which comprises abrdn plc and its subsidiaries.

Any links to websites, other than those belonging to the abrdn group, are provided for general information purposes only. We accept no responsibility for the content of these websites, nor do we guarantee their availability.

Any reference to legislation and tax is based on abrdn’s understanding of United Kingdom law and HM Revenue & Customs practice at the date of production. These may be subject to change in the future. Tax rates and reliefs may be altered. The value of tax reliefs to the investor depends on their financial circumstances. No guarantees are given regarding the effectiveness of any arrangements entered into on the basis of these comments.

This website describes products and services provided by subsidiaries of abrdn group.

Full product and service provider details are described on the legal information.

abrdn plc is registered in Scotland (SC286832) at 1 George Street, Edinburgh, EH2 2LL

Standard Life Savings Limited is registered in Scotland (SC180203) at 1 George Street, Edinburgh, EH2 2LL.

Standard Life Savings Limited is authorised and regulated by the Financial Conduct Authority.

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