We have updated our handy Tax Tables for the new financial year. We cannot yet send out hard copies, as our physical office remains closed, however they are readily available on our website.
We summarise some of the key changes below:
Income Tax: No changes to income tax thresholds, allowances or tax rates in the new tax year
Dividend Tax: The rates of tax remain the same, as does the allowance
ISA allowance: Remains £20,000, although you are now able to pay in up to £9,000 into a Junior ISA or Child Trust Fund, for your children or grandchildren
Capital Gains Tax: These rates remain the same, although the tax-free annual allowance has increased to £12,300
Entrepreneurs’ Relief: This has been reduced from a lifetime limit of £10million to £1million. The tax payable is 10% of this sum, when selling your business
Pension Regulation: Changes have been introduced that affect how much high earners can pay into their pension each year.
The two tapered annual allowance thresholds (threshold and adjusted) have each been raised by £90,000.
This means that from 2020-21 the “threshold income” will be £200,000, so individuals with income below this level will not be affected by the tapered annual allowance, and the annual allowance will only begin to taper down for individuals who also have an “adjusted income” above £240,000.
Previously, threshold income was £110,000 while adjusted income was £150,000.
If you earn over £200,000 you may want to get in touch to discuss this, otherwise your adviser will discuss this with you at your annual review.
The Lifetime Allowance for pension purposes is now £1,073,100.
There are no changes to Inheritance Tax, although the Residential Nil Rate Band increases as planned to £175,000.