Budget: 29th October 2018
On 29th October, Philip Hammond, the Chancellor of the Exchequer, presented his budget to the House of Commons.
“…austerity is coming to an end – but discipline will remain” were his words, summarising his presentation.
Some of the key points he raised in the budget are here:
personal tax allowance
Personal tax allowances will be raised from April 2019.
- Basic rate tax threshold will be increased to £12,500
- Higher rate tax threshold will be increased to £50,000
capital gains tax
From April 2020, if you move OUT of your residential property and rent it out, private residence relief will be reduced from 18 months to 9 months. This means if you sell the property after moving out you will be liable to capital gains tax on the sale of the property within 9 months. This may occur if you move back in with parents or perhaps you move in with a partner and you rent your own home out. If the reason for moving out of the home is disability or moving into a care home then the capital gains exemption period remains at 36 months.
From 6th April 2020 (the year after next) capital gains tax will be payable within 30 days of the sale. Currently the system allows up to 21 months (depending on when the sale occurs) before the tax becomes due.
inheritance tax
The inheritance nil rate band will remain at £325,000 for 2019-2020.
The residence nil rate tax band will increase to £150,000 from 6th April 2019.
- Both of these allowances can be used before the 40% inheritance tax is implemented.
savings
The amount you are able to invest into an ISA remains at £20,000 for 2019-2020.
Children’s ISA limit from 6th April 2019 is £4,368.
pensions
The lifetime pension allowance will increase to £1,055,000 for 2019-2020. So if you are planning to draw down your pension and your funds already exceed the current £1.03million limit it may be worth waiting until April to do so.
If you are employed and are in an auto-enrolment pension scheme, the minimum contributions will increase significantly (employer and employee contributions) so be aware of that.
stamp duty land tax (SDLT)
Stamp Duty Land Tax relief to first time buyers in England and Northern Ireland will be extended to the purchase of shared ownership property and this relief will be effective 28th October, 2018 and back-dated to 22nd November 2017.
Check your stamp duty liability here: SDLT Calculator
There are plans for a consultation in January 2019 regarding the implementation of a SDLT surcharge of 1% to non-residents buying residential property in England and Northern Ireland.
budget summary
To read parliament’s summary please click here: Parliament’s Budget Article
Your home may be at risk if you fail to keep up the repayments on your mortgage.
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