As another financial year draws to a close, all of our clients must now be focused on what lies ahead in the 2018/19 tax year.
From 6 April 2018, several major changes to tax thresholds and reliefs will be introduced.
These measures may affect your financial situation, so it is imperative to be are aware of the changes and prepare accordingly.
Here are 3 key changes that may affect your personal finances in the 2018/19 tax year:
The tax-free dividend allowance will fall to just £2,000 from 6 April 2018.
The current allowance stands at £5,000, meaning those with dividend income will face significant tax increases in the next financial year.
Basic rate taxpayers (7.5%) face increases of £225, higher rate taxpayers (32.5%) will see their tax bills rise by £975, while those paying the additional rate (38.1%) will be hit with a £1,143 increase.
Residence nil-rate band
Also known as the ‘family home allowance’, this enables people to pass on a residential property to direct descendants and save on death duties.
It permits the further reduction of inheritance tax due on passing their interest on death in the family home and works on top of the £325,000 basic nil-rate band.
From 6 April 2018, this will increase from £100,000 to £125,000.
The annual capital gains tax (CGT) allowance will rise from £11,300 to £11,700 from 6 April 2018, while the CGT exemption threshold for trustees will increase from £5,650 to £5,850.
The income tax personal allowance will rise from £11,500 to £11,850, and the higher rate threshold will increase from £45,001 to £46,351.
Our team of accountants and tax advisers can help you prepare your personal finances for the upcoming tax year.
Contact us on 01628 631 056 or email firstname.lastname@example.org to learn about our tax planning services for individuals.