14 March 2019

Tax Changes Coming Up (April 2019)

New Tax Year, New Numbers
The annual Budget is of course the time when the Chancellor announces forthcoming changes. Assuming that his proposals are accepted by Parliament, they are then implemented at a later date - often from the beginning of a new tax year.

So here are some changes coming along this April.

Increased Personal Allowance 

A recent big announcement brought forward the date when the Personal Allowance increases to £12,500 (the previous big announcement!). You can receive that much income without paying Income Tax - although the National Insurance tax may still apply to employment income.

Inheritance Tax

No change to the basic Nil Rate Band (£325,000) but the "Residence Nil Rate Band" increases to £150,000 in April. This gives you an extra amount before IHT applies, provided certain conditions are met. Broadly speaking that means you are leaving your home to children.

Probate Fees

These have been fixed at £155 previously, but from April will be on a sliding scale based on the value of the estate. Up to £50,000 there is no fee, but for estates £500,000 - £1m (covering many people in the south who own a property) it will be £2,500. A massive increase!

Pension Lifetime Allowance

This is the maximum value pension assets that you can hold before their tax benefits start to be withdrawn. In April it rises with inflation to £1.055m. 

Auto-Enrolment Pension Increases

In line with previous legislation, employers and employees will have higher minimum contribution levels to staff pensions. (From a minimum of 5% total with 2% of that from the employer, to 8% total / 3% employer).

ISAs

Later in the tax year (November) the Help-to-Buy ISA scheme will be terminated for new applications (have a look at Lifetime ISAs instead.) The standard ISA allowance is unchanged at £20,000.


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