Andrew Miedzinski, Magus Financial Planning Director, outlines the key changes from the spring budget.
Jeremy Hunt most likely learnt valuable lessons from his predecessor on how to remain in the job for a bit longer. Clearly, he has taken a more “conservative” approach (forgive my irony) and if there was anyone anticipating his budget to bring a high level of excitement, I have checked…all the lights are still intact.
Some of the status quo has remained, and there have been both winners and losers. Let us look at some the key points for individuals:
Income tax
- Personal allowance – frozen at £12,570 until April 2028
- Additional rate of tax – 45% applied from £125,140 instead of £150,000
- Dividend allowance – halved twice from this April to £1,000 and next April to £500
Individual Savings Account (ISA)
- Adults – allowance frozen at £20,000
- Juniors – allowance frozen at £9,000
Capital Gains Tax
- Allowance – reduced to £6,000 from this April and £3,000 next April
- Same for Trusts – reduced to £3,000 from this April and £1,500 next April
Pensions
- Annual Allowance – increased to £60,000
- Annual Allowance for high earners (with some additional benefits) – increased to £10,000
Lifetime Allowance
- Abolished – Christmas has come very early for some!
- Tax Free Cash entitlement – frozen at 25% of current limit, but with additional allowance for anyone with previously secured protections (there are still options to secure a higher one)
Inheritance tax
- Nil Rate Band – frozen at £325,000 until April 2028
- Residence Nil Rate Band – frozen at £175,000 until April 2028
Despite the arctic winds blowing from many of the frozen items, there are opportunities for interesting planning, using some of the new allowances to keep reducing your taxes. If you’d like to speak to one of our Planners about making the most of the new allowances, get in touch.
Risk warnings
This article is distributed for educational purposes and should not be considered investment advice or an offer of any security for sale. This article contains the opinions of the author but not necessarily the Firm and does not represent a recommendation of any particular security, strategy, or investment product. Information contained herein has been obtained from sources believed to be reliable but is not guaranteed.
Past performance is not indicative of future results and no representation is made that the stated results will be replicated.
