22nd November 2017 at 5:24pm
With today’s Budget held for the first time in its new, permanent autumn slot, we look at the main announcements and what they could mean for you.
As Jamie Jenkins, Standard Life’s Head of Pensions Strategy, explains.
Immediate and complete removal of Stamp Duty for first-time buyers
“There weren’t any real surprises today.
“Savers have braced themselves for surprises from the Budget speeches of recent years. Not this time. There weren’t any big changes on pensions and ISAs.”
Personal tax thresholds increased
Your personal income tax allowance increases to £11,850 from April, with the 40% higher-tax rate threshold going up to £46,350.
The result is you’ll pay less tax on your earnings.
If you are a Scottish taxpayer, the Scottish Budget on 14 December sets income tax thresholds under devolved political powers.
We’ll bring you more on this and what it might mean for you next month.
Stamp duty help for first-time buyers – from today
Good news and a welcome boost for many people trying to get on the property ladder, first-time buyers won’t have to pay stamp duty on properties up to £300,000.
The lifetime allowance is going up in line with inflation
“If there was any big announcement in this Budget, it was the immediate and complete removal of Stamp Duty for first-time buyers for houses up to £300,000,” explains Jamie Jenkins.
“This will cover 80% of people looking to get on the property ladder. For houses valued up to £500,000, there’s no stamp duty on the first £300,000, too. These stamp duty changes should cover 95% of first-time buyers.”
What’s already in plan for the next tax year – from 6 April 2018
You get a bigger pension lifetime allowance
In another positive step for those saving for their future, the lifetime allowance is going up in line with inflation to £1,030,000.
The increase in the pension lifetime allowance is likely to be very welcome
While pension savings over this will attract an extra tax charge, pensions remain a very tax-efficient way to save.
If you’ve built up considerable pension savings, the increase in the pension lifetime allowance is likely to be very welcome.
Changes to the tax-free dividend allowance
The dividend allowance is £2,000 from next April, down from £5,000.
The allowance means you don’t pay tax on the first £2,000 of any dividend income, even if you have other income.
It’s a useful allowance, particularly if you’re a smaller investor looking to get income from shares which aren’t sitting in an ISA. Any income you get from an ISA is tax free, whatever rate of tax you pay.
Inheritance tax allowance (IHT)
When your pass on your home to a close family member when you die, there’s an extra IHT allowance on top of the standard £325,000 nil rate band for each person.
It’s going up to £125,000 from £100,000 next April. What it means is that more of your estate can sit outside of inheritance tax. Couples can pass on assets of up to £900,000 to their loved ones free of IHT.
Read more on Gov.uk, or speak to a financial adviser. There’s usually a cost for this.
Capital gains tax allowance
It’s going up by £400 to £11,700.
The information here shouldn’t be regarded as financial advice and is based on our understanding in November 2017. As with any investments, the value can go down as well as up and you may get back less than you paid in.