Personal Tax

Income Tax

The government has been committed to raising the personal allowance (PA) to £12,500 and the higher rate threshold (HRT) to £50,000 by 2020 but has announced that they will reach this commitment one year early with PA and HRT increasing to £12,500 and £50,000 respectively in April 2019. This means that in 2019-20 a typical taxpayer will pay £130 less than in 2018-19 and £1,205 less tax than in 2010-11.

The band of savings income that is subject to the 0% starting rate will be kept at its current level of £5,000 for 2019-20.

Individual Savings Account annual subscription limits – the adult ISA annual subscription limit for 2019-20 will remain unchanged at £20,000. The annual subscription limit for Junior ISAs for 2019-20 will be uprated in line with CPI to £4,368.  The annual subscription limit for Child Trust Funds for 2019-20 will also be uprated in line with CPI to £4,368.

Pensions

The lifetime allowance for pension savings will increase in line with CPI for 2019-20, rising to £1,055,000 but no further restrictions on tax relief were announced.

Capital Gains

Entrepreneurs’ Relief  – from 6 April 2019 the minimum period throughout which the qualifying conditions for relief must be met will be extended from 12 months to 24 months. This is to encourage longer term business investments.

Lettings Relief will be reformed from April 2020 so that it only applies in circumstances where the owner of the property is in shared occupancy with the tenant. The final period exemption will also be reduced from 18 months to 9 months. More detail to follow on this but there will be no changes to the 36 months final period exemption available to disabled people or those in a care home.

Stamp duty land tax

First-time buyers’ relief in England and Northern Ireland will be extended so that all qualifying shared ownership property purchasers can benefit, whether or not the purchaser elects to pay SDLT on the market value of the property. This change will apply to relevant transactions with an effective date on or after 29 October 2018 and will also be backdated to 22 November 2017 so that those eligible who have not previously claimed first-time buyers relief will be able to amend their return to claim a refund.

The government will also publish a consultation in January 2019 on a SDLT surcharge of 1% for non-residents buying residential property in England and Northern Ireland.

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