Tax Planning Thoughts - March 2019
Tax Planning Thoughts – March 2019
The Chancellor’s Spring Statement on Wednesday confirmed a number of tax measures introduced in the October Budget.
The highlights for individuals for the 2019/20 tax year include –
- The Personal Allowance will be increased by £650 to £12,500. The Basic Rate limit will also be increased to £37,500. This means that the income level before higher rate tax becomes payable will be increased to £50,000;
- The Capital Gains Tax (CGT) annual exempt amount will be increased by £300 to £12,000;
- The Inheritance Tax (IHT) nil rate band will remain constant at £325,000. However, the residential nil rate band (RNRB) will be increased by £25,000 to £150,000. The combined band increasing to £475,000 – assuming that the main residence is left to a direct descendant;
- Whilst the overall ISA allowance will continue at £20,000, the Junior ISA (JISA) and Child Trust Fund allowances will increase to £4,368;
- The minimum contributions for auto-enrolled workplace pension schemes will increase with Employer contributions increasing to 3% of qualifying earnings and Employee contributions increasing to 5% of qualifying earnings.
Whilst improving tax efficiencies for individuals is a constant theme, it is most effectively employed at the beginning of the new tax year.