Submitted by Sestini & Co
| on Tue, 03/18/2014 - 20:37 | In Uncategorized
As we await tomorrow’s Budget Speech with bated breath, the world wide web is awash with predictions about what may or may not be announced and what may actually find its way into legislation, for example:
- Will the Chancellor make the “bold” move of taking 1p off the basic rate of income tax?
- Will the personal allowance increase beyond £10,000, taking even more people out of income tax? (But not out of National Insurance by the way)
- Will stamp duty be abolished? (OK probably not, but it could be reformed to move to a tiered system rather than the current “cliff face” approach)
- Will beer drinkers be favoured over those who favour wine? And will cider be left alone?
- Will the child benefit claw-back be abolished? (Or is the £2,000 tax relief on childcare effectively its replacement?)
- Will “gasp” the 40% tax rate threshold increase after several years of erosion?
Some, all or none of the above will be announced tomorrow. Sestini & Co will be following carefully and reporting back the highlights.
But there are a few things we do know already:
- the pension contribution limit will reduce from £50,000 to £40,000 per annum – this might not affect everyone but it is potentially an issue to people with a defined benefit pension plan who receive a payrise or move into a new age bracket; (and it’s a timely reminder to organise that lump sum pension contribution you’ve been thinking about for a while)
- the ISA limit will increase – but this is no reason not to top yours up now before the end of the tax year (there are rumours of a lifetime cap so it makes sense to get those contributions done now)
- the large companies’ rate of corporation tax will reduce to 20% becoming one of the lowest across Europe
- the 3-year window allowed before selling a former main residence free of capital gains tax will be reduced to 18 months
- it is still somewhat tax efficient to be married: the spousal exemptions for inheritance tax and CGT mean that assets can pass freely and thus utilise annual exemptions and lower tax rate bands more effectively (a bit more year end planning for you :-))
If you’d like to discuss any of the above, or simply have a chat about your own tax situation or year end planning needs then please contact us at firstname.lastname@example.org 🙂