Autumn Budget 2017 - what it means for you and your clients
22 November 2017
There were no significant tax or pensions changes in today’s Budget that will have any impact for you or your clients. This means advisers can plan for the tax year ahead with confidence and clarity.
This was the first Budget of the new Parliament and the first in its new permanent autumn home. This now provides welcome breathing space between the announcement of Budget changes and their introduction.
The key points for advisers in the 2018/19 tax year as a result of today’s Budget, and from measures already announced, are:
Pensions
- The pension lifetime allowance will rise to £1,030,000 and reassuringly there are no changes to the pensions funding limits - i.e. the annual allowance remains at £40,000 and will not be tapered until adjusted income exceeds £150,000.
Income tax
- The personal allowance and higher rate threshold will increase to £11,850 and £46,350. The income tax rates and bands which will apply to Scottish taxpayers will be announced in Scottish Budget on 14 December.
- The dividend allowance will be cut to £2,000 as already announced. In particular, this will hit small and medium sized business owners who take their profits as a dividend. Employer pension contributions will become an even more attractive way of extracting profits from a business.
- There are no changes to any other income tax bands.
Capital gains tax
- The capital gains tax allowance will increase by £400 to £11,700.
Inheritance tax
- As expected, the IHT nil rate band will remain at £325,000 until April 2021 and the residence nil rate band will increase from £100,000 to £125,000. In total that will mean that, from April, couples can leave assets up to £900,000 to future generation free of IHT.
Trusts
- There will be a consultation published in 2018 to consider the simplification and fairness of trust taxation.
ISAs
- Annual ISA limits stay at £20,000 per person, with a range of different ISAs to choose from. Each has its own rules and limits and is designed for different purposes, whether that’s medium or long term investing, or saving for a house deposit.
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