The third Budget in
12 months
Finishing with a flourish GO hailed his third budget in a year as for the next generation.
This Budget looked as if it would be a difficult one for the
Chancellor, faced as he was with disappointing economic numbers and the need to
avoid ruffling feathers ahead of June’s in/out referendum. What was to have
been the big announcement – reform of pensions – was kicked into the long grass
a few weeks ago. Nevertheless, Mr Osborne did spring a few surprises, including
some tax reductions.
How will this Budget affect you? If you are – or want to be
– a saver, then there is plenty to consider. From April 2017 a new ISA, the
Lifetime ISA, will be launched for the under-40s. It looks as if it is a close
relation of the recently abandoned pensions ISA. Also from 2017/18, the normal
ISA contribution limit – unchanged for 2016/17 – will rise to £20,000.
Forgive my jaded cynicism, but personally, I see this
new ISA as a small introduction to more and bigger changes to pension
legislation over the coming years. Time will tell…
Capital gains tax (CGT) rates will fall from 2016/17 to 20%
and 10%, although the current rates of 28% and 18% will continue to apply to
residential property (another buy-to-let attack) and carried interests. There
will be a new entrepreneurs’ relief (effectively 10% CGT) for external long
term investors in unlisted companies.
Other important changes for included:
·
Increases in the personal allowance for 2017/18
to £11,500 and the higher rate threshold to £45,000. (both previously announced, of course)
·
A restructuring of stamp duty land tax (SDLT) on
commercial properties.
·
A
major revamp of business rates, permanently doubling the Small Business Rate
Relief.
As usual, we are on hand to help you if you would like to
discuss any of the issues raised in the Spring Budget in further details. We
will be pleased to hear from you. Tax tables are available on our website.
