As the sun appears to be brighter than it has been in about five long months, it can only signify that the new tax year is upon us.
There have been a few announcements what the new tax year will bring to our clients and we will quickly summarise some key points.
Some welcome news from the Chancellor - Inheritance Tax is changing allowing families to transfer £100,000 under the name "family home allowance" per person when the property is left to a direct family member. This is in addition to the current £325,000 threshold where any estates worth less than this amount will not be taxed.
ISA Limits Raised
The limit on the amount you can save into a tax friendly cash ISA has dramatically increased from £15,420 to £20,000.
The Lifetime ISA
The brand new lifetime individual savings account will allow people to save for a house or plan extensively for their retirement. The Government has promised a 25% top up on the savings. People between the ages of 18 and 39 can save up to £4,000 a year with the Government top up of £1000 max. This money can be used towards their first new home alternatively taken out after 60 tax free.
Tax Credits and Universal Credit Limits to Two Children
Babies born into families that already have two children will no long receive any additional support via tax credits. This is on top of the scrapping of the extra £545 a year for new borns who are the first in the family.
Personal Allowance and Higher-Rate Threshold Going Up!
The amount that can be earned before paying income tax has increased from £11,000 to £11,500 alongside the threshold for higher rate tax payers increasing from £43,000 to £45,000 (except for Scotland).
If you have any further queries about what the new tax year will bring to you, your family or your business, please get in touch with us and we will be happy to help.