Having been rebuffed by younger voters in the June general election, the Government is understandably concerned to be seen to be addressing their needs, and this was reflected in the Chancellor’s November Budget announcements. Of particular concern has been the difficulty young people are experiencing in getting onto the
The retired senior judge in the Court of Protection commented recently on the Today programme on BBC Radio 4 that people should think twice before executing a Lasting Power of Attorney (‘LPA’), because they might be served better by the appointment of a Deputy of the Court of Protection.
The Finance Bill 2017 confirms that the so-called Money Purchase Annual Allowance (‘MPAA’) has been reduced from £10,000 to £4,000 p.a. with retrospective effect from 6 April 2017. The MPAA limits the pension contribution on which people who have drawn income benefits from their personal or other “money purchase’
Pension rights are usually the second most valuable asset, after the family home, which need to be considered on divorce, and three options are available to divorcing couples: Pensions can be off-set against other matrimonial assets Courts can make Attachment Orders, directing pension trustees to pay all or part
Cash ISAs have declined in popularity, not only in relation to stocks and shares ISAs, but also in relation to other forms of deposit. Interest rates have fallen and the attractions of cash ISAs have also been undermined by the introduction in April 2016 of the personal savings allowance
HM Revenue & Customs is launching a new simplified system for calculating tax bills, which will result in thousands of taxpayers being relieved of the chore of filling out tax returns. Taxpayers affected by the change will receive letters saying that in future their tax assessments will be based
A retired judge has suggested that people wishing to appoint others to look after their affairs in the event of their becoming incapable of doing do themselves would be better protected by a Deputy of the Court of Protection than by a relative or friend acting under a Lasting
In order to assist parents of young children to stay in the jobs market, the government has established a scheme which enables the parents to buy childcare vouchers which benefit from tax relief in the form of ‘salary sacrifice’. However, this scheme is not available to the self-employed and
Perhaps surprisingly, divorce rates are falling. According to the Office for National Statistics, there were 101,055 divorces in the UK in 2015, representing a 9% reduction on the previous year. However, the average age at which people are getting divorced is at an all-time high. The average age for
MPAA aside, reductions in both the annual pension contribution allowance and the lifetime allowance have curtailed the use of pensions as a savings medium. However, there may be an opportunity to pay contributions to the scheme of a spouse or civil partner or cohabitee. The person benefiting from the
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Having been rebuffed by younger voters in the June general election, the Government is understandably concerned to be seen to be addressing their needs, and this was reflected in the Chancellor’s November Budget announcements.
Of particular concern has been the difficulty young people are experiencing in getting onto the housing ladder, with research indicating that the number of home owning 25-34 year olds has fallen from 59% to 38% over the last 13 years.
Government funding is to be provided for house building and planning laws are to be reformed. In addition, first-time buyers are to be exempt from Stamp Duty Land Tax on houses worth up to £300,000, and those buying for up to £500,000 in higher value areas will benefit from a nil rate band on the first £300,000.
Other changes were less significant:
Income tax. With effect from April 2018, basic rate tax will become payable when income exceeds £11,850 p.a. (an increase of £350) and higher rate tax (at 40%) will apply to income in excess of £46,350 p.a. (an increase of £1,650). Additional rate tax will continue to be payable at 45% on income over £150,000 and tax on dividends at 38.1%.
Marriage allowance. Spouses are permitted to transfer 10% of their personal allowance to each other, provided neither are higher or additional rate taxpayers This can be backdated for up to four years and legislation is to be introduced which will allow transfers to be made from or to a deceased spouse within the same four year period.
Capital gains tax
The annual exemption for capital gains will increase in line with the consumer price index from £11,300 to £11,700 for 2018/19, and the equivalent rate for trusts will rise from £5,650 to £5,850.
Venture capital
The rules are to be tightened-up to restrict investments which qualify for the tax advantages enjoyed by Venture Capital Trusts (‘VCTs’), Enterprise Investment Schemes (’EISs’) and Seed EISs (‘SEISs’). In future, investments must be confined to entrepreneurial companies whose objective is to grow and develop and which involve a significant risk of capital loss.
Additional encouragement is to be given to investing in “knowledge intensive” companies, which satisfy various conditions such as engaging in the creation of patents and other intellectual property and having a certain number of skilled employees. The annual limit for investment in an EIS will be increased from £1 million to £2 million where more than £1 million is invested in such companies.
State pension. The basic State pension will be increased by 3% (£3.65 per week) and the new State pension by £4.80 per week in accordance with the “Triple lock”. This is the government commitment to increasing payments every year by whichever is the highest of inflation, average earnings and a minimum of 2.5%.
Pension savings allowances. Contrary to some expectations, the Chancellor did not announce any further reduction in either the annual pension savings allowance or the lifetime allowance.
Entrepreneurs’ relief. A consultation will take place in Spring 2018 to consider how this relief might be extended to shareholders whose holdings reduce below 5% as a result of the company issuing new shares.
