Spring Budget March 2020

By Tim Benson | 12th March 2020
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Key Points for Savers & Investors

Income tax

  • Personal Allowance remains unchanged at £12,500.
  • The threshold above which higher earners start paying 40% tax is also unchanged at £50,000.
  • They are due to increase in line with Consumer Price Index (CPI) in future years.

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 2020/21 to £1,073,100.

Annual Allowance

  • There are no changes to pension annual allowances (AA). The standard AA remains at £40,000
  • However, the high-income AA taper rules have been changed. Adjusted Income (the level at which income must be earned before the Tapering starts) increases by £90,000 to £240,000, with the Threshold income also increasing to £200,000.

Individual Savings Account (ISA)

  • The ISA annual subscription limit for 2020/21 will remain unchanged at £20,000.
  • The annual subscription limit for Junior ISAs and Child Trust Funds for 2020/21 will be increased to £9,000.

Capital Gains Tax

  • The capital gains tax allowance will increase to £12,300.

Inheritance Tax

  • The IHT Nil Rate Band will remain frozen at £325,000 until 2021/2022 as previously announced.
  • The Residence Nil Rate Band (RNRB) will rise to £175,000 from April 2020 as previously announced.

General Tax issues

  • Entrepreneur Relief has been amended with the Lifetime limit reducing from £10m to £1m.  
  • Corporation Tax remains unchanged at 19%
  • National Insurance Contribution Tax threshold increases from £8,632 to £9,500.

If you would like to discuss your current financial planning arrangements in light of any of these changes to make sure you are maximising the opportunities now available to you, please do not hesitate to contact us.

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