27/10/2021
Today the Chancellor Rishi Sunak delivered his Autumn Budget. The main areas of note with regards to Financial Planning are:
The State Pension ‘triple lock’ - In recent years, State Pensions have been uprated each year by the higher of CPI, 2.5% and the average increase in earnings (known as the ‘triple lock’). However, for tax year 2022/23, the earnings element has been suspended. This means that, in 2022/23, State Pensions will increase by 3.1% (the September CPI figure).
ISAs - The 2022/23 annual subscription limits for adult and junior ISAs will remain at £20,000 and £9,000 respectively.
Pension top-ups for low earners - Low earners with earning less than their personal allowance can miss out on tax relief if they are members of schemes where employee contributions are collected from gross pay before tax. HMRC will identify these individuals and each will become entitled to a top-up from 2025/26, averaging £53 a year.
Pension tax relief - There were no changes to pension tax relief in the Chancellor’s Budget.
The IHT 'Nil Rate Band' remains at £325,000 per individual, plus £175,000 each on their main residence, therefore £1million for a couple with a main residence worth over £350,000.
No change to CGT. The annual exempt amount will remain frozen at £12,300 for individuals (and personal representatives) and to £6,150 for trustees of settlements, until 2025/26.
The new personal allowance will remain frozen at £12,570 with the basic rate band increasing to £37,700 meaning that the higher rate tax threshold will be £50,270. The personal allowance and higher rate threshold will remain fixed until 2025/26.
If you have any questions, please get in touch. [email protected]
Tony
