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So Thursday 6th April 2017 was the start of the new fiscal year for 2017/18.
With regard to your personal finances we have outlined the changes to the allowances:

Income Tax and National Insurance
The personal allowance has increased from £11,000 to £11,500.

The threshold that you start to pay higher rate tax has increased from £43,000 to £45,000.

The point at which National Insurance contributions fall from 12% to 2% goes up to £45,000.

Capital Gains Tax Allowance
This has increased from £11,000 to £11,300.

Individual Savings Allowance (ISA)
This has increased from £15,240 to £20,000.

Junior ISA Allowance
This has increased from £4,080 to £4,128.

Lifetime ISA
This allows individuals aged between 18-39 to save up to £4,000 a year and gain an annual bonus of 25% from the Government. This is designed to help younger people to save for a deposit to purchase their first home.

The Residential Nil Rate Band (RNRB)
This is designed for anyone that leaves their main residence to their child or grandchild to have an additional £100,000 added to their standard nil rate band (£325,000). This will increase to £175,000 per person over the next four years (£100,000 in 2017/18, £125,000 in 2018/19, £150,000 in 2019/20 and £175,000 in 2020/21), equating to a total Inheritance Tax free allowance of £500,000 or £1m for married couples and civil partners. The RNRB is tapered at £1 for every £2 that an estate exceeds £2m.

Money Purchase Annual Allowance
If you have started to take some element of income from your pension plan and you are still contributing to a money purchase pension plan, you could have contributed £10,000 per annum. This has now been reduced to £4,000.

Buy-To-Let Mortgages Tax Relief

The amount of tax relief that landlords can obtain on mortgages is reducing. From this month the amount of higher tax relief available will be 75% (see the table below)

Finally, for those of you that are planning ahead, paying for weddings or making a charitable donation (Good Luck to you marathon runners on Sunday), remember the gifting rules:

– The estate does not pay IHT on any gift up to £3,000 in each tax year. This is known as the ‘annual exemption’.
– Leftover annual exemption can be carried over from one tax year to the next, but the maximum exemption is £6,000.

You are also able to make gifts to a UK registered charity during your lifetime or in your will and these will also be exempt from IHT.

Certain gifts don’t count towards the annual exemption and no IHT is due on these:

Wedding Gifts
– £5,000 given to a child
– £2,500 given to a grandchild or great-grandchild
– £1,000 given to anyone else

The gift must be given on or shortly before the date of the wedding ceremony.

Don’t leave it too late to plan!

Information is based on our current understanding of taxation, legislation and regulations.
Any levels and bases of relief from taxation are subject to change.
SKF Trading Ltd, trading as SK Financial

Mind the trapThe Residence Nil Rate Band

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