Steady ahead – the second Budget of 2017

The Chancellor detailed a long list of tax changes in his Autumn Budget, although he was generally more cautious than he was in his Spring announcements.

Back in March this year, Philip Hammond’s Budget debut as Chancellor almost marked his simultaneous finale in the role because of his failed attempt to raise national insurance contributions for the self-employed. This time around things have gone more favourably.

Stamp duty land tax (SDLT) and first time buyers For first time buyers (other than in Scotland), from 22 November the first £300,000 slice of their property’s purchase price is exempt from SDLT, provided their home does not cost more than £500,000. That could mean a tax saving of up to £5,000.

Income tax  The personal allowance will rise to £11,850 and the higher rate tax threshold (excluding that for non-savings, non-dividend income in Scotland) will rise to £46,350 for 2018/19. The missing Scottish threshold awaits finalisation of the Scottish Budget.

Pensions Despite many pre-Budget rumours of cuts to allowances and even the rate of tax relief, the Chancellor made no changes to reduce pension tax benefits. Doing nothing meant that the lifetime allowance will rise by default to £1,030,000 from 6 April 2018.

ISAs  The overall ISA annual subscription limit of £20,000 and the lifetime ISA (LISA) of £4,000 will be unchanged for 2018/19. The Chancellor may have decided that the forthcoming cut in the dividend allowance from £5,000 to £2,000 was enough of an incentive to invest in ISAs.

Capital gains tax The annual exemption will increase to £11,700 for 2018/19 – worth a tax saving of up to £3,276 to a higher rate taxpayer on property-related gains. Buy-to-let investors who use companies to hold their properties were less lucky as, from January 2018, a technical change will mean more of any future capital gain becoming subject to corporation tax. The change will also affect UK life companies and could reduce futher returns on UK endowment and single premium policies.

If you have any questions about the financial planning implications, please talk to us as soon as possible.

The value of tax reliefs depends on your individual circumstances. Tax laws can change. The Financial Conduct Authority does not regulate tax advice. The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.

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