Autumn Budget 2017 – what it means for you
There were no significant tax changes in the Autumn Budget. Some of my clients were worried about changes to pensions taxation; thankfully this did not happen. Here are some of the key points to bear in mind with personal financial planning:
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.
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.
Source: Standard Life
Further reading:
The Joy of Tax - Book review by me
Autumn Budget 2017: The big picture - Blog by The Tax Journal
What Everyone Needs to Know about Tax: An Introduction to the UK Tax System - Book by James Hannam based on the UK tax system.