AUTUMN 2018 BUDGET SUMMARY

Here are some of the key points which might be of interest to you.

Income tax 

Personal allowance

• The Income Tax personal allowance will be increased by £650 to £12,500 on 6 April 2019 for the 2019/20 tax year.

• The allowance will remain the same for 2020/21 and then increase in line with the Consumer Price Index (CPI).

• For higher rate taxpayers, the threshold above which higher earners start paying 40% tax is being increased from £46,350 to £50,000 in 2019/20. The threshold will remain the same for 2020/21.

The Scottish Parliament will set their own rates and bands for Scotland in its Budget due on 12 December.

Individual Savings Account 

• The ISA annual subscription limit for 2019/20 will remain unchanged at £20,000.

• The annual subscription limit for Junior ISAs and Child Trust Funds for 2019/20 will be increased in line with CPI to £4,368.

• The lifetime ISA annual subscription limit for2019/20 will remain unchanged at £4,000.

Inheritance Tax

Residence Nil Rate Band (RNRB)

• There are some minor technical amendments to the Residence Nil Rate Band (RNRB) relating to downsizing provisions and the definition of ‘inherited’ for RNRB purposes. The amendments will apply for deaths after 29 October 2018.

Inheritance tax rates and exemptions

• The Nil Rate Band will remain frozen until 2021/2022. The Residence Nil Rate Band will rise to £150,000 from April 2019.

Pension changes

Standard lifetime allowance

• The standard lifetime allowance for pensions will increase in line with the rise in the consumer prices index (CPI). For 2019/20 it will increase from £1,030,000 to £1,055,000.

Pension Dashboards

• The Government is supporting the launch of Pension Dashboards; innovative tools that will allow an individual to see their pension pots, including their State Pension, in one place.
• The Department for Work and Pensions (DWP) will consult later this year on the detailed design for industry-led Pension Dashboards.

Boosting pensions for the self-employed

• This winter, the DWP will publish a paper setting out the Government’s approach to increasing pension participation and savings persistency among the self-employed. This follows the 2017 review of automatic enrolment and will focus on expanding evidence through a programme of targeted interventions and partnerships.

 Autumn Budget 2018