Richard Porter Financial Adviser St Albans - Autumn Budget Highlights

Friday 24 November, 2017

Autumn Budget Highlights

Richard Porter, independent financial adviser and member of the St Albans financial planning team said:

'The Autumn budget was much as expected and there were very few surprises for the financial planning industry.  Below are the main Autumn Budget highlights that relate to your financial planning.  Please remember that it is always worth contacting your financial consultant to clarify how your financial planning position is affected by these changes.  Lonsdale Wealth Management specialise in Lifetime Financial Planning and offer a free one hour consultation to discuss your requirements. For more information contact us on 01727 845500.’

Pensions

Lifetime allowance for pensions
The chancellor confirmed that the lifetime allowance for pension savings will increase in line with CPI, rising to £1,030,000 for 2018/19.

State Pension and Pension Credit
The basic State Pension will be increased by the triple lock. The rise in April 2018 will be 3%, a cash increase of £3.65 per week for the full basic State Pension. 

Stamp duty land tax (SDLT)
The announcement that Stamp duty has been abolished on homes under £300,000 is welcome news for first-time buyers as they will not pay stamp duty on the first £300,000 for homes worth between £300,000 and £500,000. The normal rates of stamp duty will apply on any price above that. This change is effective from 22nd November 2017.

The government will amend SDLT higher rates for additional properties with immediate effect. The changes will benefit those increasing their share of their own home, families affected by a divorce court order, and cases where properties are held in trust for children subject to Court of Protection orders. The government will also remove a potential opportunity for avoidance. 

National Living Wage and the National Minimum Wage

The National Living Wage for those aged 25 and over will increase from £7.50 per hour to £7.83 per hour from April 2018. From April it will be £7.38 per hour for 21 to 24 year olds, £5.90 for 18 - 20 year olds and £4.20 for 16 and 17 year olds.

Income tax and National Insurance 

Personal allowance (PA) and higher rate threshold (HRT)
The government is committed to raising the Personal Allowance to £12,500 and the Higher Rate Threshold to £50,000 by 2020 The Budget announces that in 2018/19 the PA and HRT will increase to £11,850 and £46,350 respectively.

Starting rate for savings
The band of savings income that is subject to the 0% starting rate will be kept at its current level of £5,000 for 2018/19. 

Taxation of trusts
The government will publish a consultation in 2018 on how to make the taxation of trusts simpler, fairer, and more transparent. 

National Insurance Contributions (NICs) Bill
As previously announced, the government will delay implementing a series of NICs policies by one year. These are the abolition of Class 2 NICs, reforms to the NICs treatment of termination payments, and changes to the NICs treatment of sporting testimonials.

Class 4 National Insurance contributions
As previously announced, the government will no longer proceed with an increase to the main rate of Class 4 NICs from 9% to 10% in April 2018, and to 11% in April 2019.

Capital Gains Tax

Capital Gains Tax (CGT) payment window
The introduction of the 30-day payment window between a capital gain arising on a residential property and payment will be deferred until April 2020.

Taxing gains made by non-residents on immovable property
To align the UK with other countries and remove an advantage which non-residents have over UK residents, all gains on non-resident disposals of UK property will be brought within the scope of UK tax. This will apply to gains accrued on or after April 2019. The government intends to include targeted exemptions for institutional investors such as pension funds.

Investments

Individual Savings Account (ISA) annual subscription limits
The ISA annual subscription limit for 2018/19 will remain unchanged at £20,000. The annual subscription limit for Junior ISAs and Child Trust Funds for 2018/19 will be uprated in line with CPI to £4,260. 
Save As You Earn scheme – Employees on maternity and parental leave will be able to take up to a 12 month pause from saving into their Save As You Earn employee share scheme, increased from 6 months currently. The change will take effect from 6 April 2018.

Life assurance and overseas pension schemes
From April 2019, tax relief for employer premiums paid into life assurance products or certain overseas pension schemes will be modernised to cover policies when an employee nominates an individual or registered charity to be their beneficiary. 

The Budget also announced an action plan to unlock over £20 billion of patient capital investment to finance growth in innovative firms over 10 years.  

 

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