The 2018/19 tax year has just begun, bringing with it some new tax and finance measures.
Whether you’re looking to plan your personal finances or prepare your business for the year ahead, here’s a reminder of some of the key changes that came in on or before 6 April 2018.
1) The personal allowance is higher
The personal allowance has risen to £11,850 across the UK, and the higher rate threshold has increased to £46,350 for England, Wales and Northern Ireland.
2) There’s a new income tax system in Scotland
For Scotland, 5 income tax bands now apply.
The higher rate starts at £43,431, and 2 new bands have been introduced – a starter rate from £11,850 to £13,850, and an intermediate rate from £24,000 to £43,430.
3) Property tax has changed in Wales
While stamp duty land tax in England and Northern Ireland has remained unchanged since November 2017, Wales replaced stamp duty land tax with land transaction tax from 1 April.
For first-time buyers in Scotland, the government is consulting on abolishing land and buildings transaction tax on properties below £175,000.
4) The residence nil-rate band has increased
While the inheritance tax (IHT) threshold remains unchanged at £325,000, the residence nil-rate band has risen to £125,000.
The residence nil-rate band can be added to the basic IHT threshold under qualifying conditions.
5) There’s a higher Junior ISA limit
The maximum amount that can be saved into a Junior ISA has increased to £4,260. For adult ISAs, the limit remains at £20,000.
6) The enterprise investment scheme limit is higher
The investment limit for the enterprise investment scheme has been altered, so it’s now possible to invest up to £2 million in knowledge-intensive companies.
A knowledge-intensive company is classed as a smaller, innovative business carrying out R&D and other activities to develop intellectual property for its own purposes.
7) Capital gains tax allowance has increased
Capital gains tax allowance has increased to £11,700.
The indexation allowance used to calculate capital gains tax was removed from 1 January 2018, so capital gains made by a business will be calculated using the allowance up to December 2017.
The new rules mean any assets bought after 1 January 2018 will not have any indexation allowance associated with them.
Are you making the most of the tax opportunities available?
Get in touch with firstname.lastname@example.org or call 01628 631 056 to discuss your personal or business tax planning.