Autumn Budget 2018
After Mondays budget we have come together as a company to look at the potential impact of the chancellors Autumn Budget, to summarise the changes in relation to personal finances.
As always we are here to help, so please feel free to contact your adviser if you have any queries on the budget and how it may affect your specific portfolio.
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With no significant tax or pension changes in the Budget, We at Financial Advice Centre can now plan for the tax year ahead with confidence. The key planning points from the Budget, and from measures already announced, are:
- It was pleasing to see 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.
- The pension lifetime allowance (LTA) will rise to £1,055,000 from April 2019.
- There were concerns the chancellor would look to make large saving for the treasury by reducing tax relief on pension contributions. 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.
- 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.
- 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.
- Annual ISA limits stay at £20,000 per person, with no reduction in the range of ISA options available to meet different needs.
With no significant changes or surprises, we are pleased to inform all our clients there is no need for any changes to the way we manage the investments you hold through us.
Most market indices have been hit hard by geo-political rhetoric in October, however markets appeared to receive the budget positively with our own FTSE 100 increasing on Monday. Word markets remain volatile and the Brexit issue continues to play a large part in the volatility we are seeing in UK and Europe.
To find out more about the current market outlook and the effect of Brexit on our investments please take a look at the Newsletter we sent out recently where we have engaged with some top fund managers & Market analysts to gain real insight into these maters and relay to you. You can read this again by clicking here.
If you have any questions or queries regarding your investments or the budget please as always feel free to contact your adviser.
The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This communication is designed to give you information only and does not constitute personal advice based on your circumstances. Please contact us should you wish to seek personal advice from one of our Financial Advisers.