The measures announced in the Autumn 2017 Budget include:
Despite recent speculation to the contrary, the lifetime allowance will be increased as planned from 6 April 2018 by 3%, in line with the increase in the Consumer Prices Index (CPI) in the 12 months to September 2017. This means an increase from £1 million to £1,030,000.
Life assurance and overseas pension schemes
Although short on detail, it has been announced that, from April 2019, tax relief on employer premiums paid to provide life assurance cover, or to certain overseas pension schemes, is to be modernised to cover policies where an employee nominates either an individual or a registered charity as their beneficiary. We look forward to seeing the Finance Bill for further details.
Master trust tax registration
It has been confirmed that, as announced in the Spring Budget 2017, HMRC will be given new powers to register and de-register mastertrust schemes, and schemes for dormant companies, from 6 April 2018. Following a recent consultation, the draft legislation on this is unchanged.
The basic State Pension will increase in April 2018 by 3% as a result of the triple lock. This will mean an increase of £3.65 per week to £125.95 per week for the full basic State Pension. The new State Pension will also be increased by the triple lock, resulting in an increase of £4.80 per week to £164.35 per week for the full new State Pension. Additionally, the triple lock increase will also be reflected in an increase to the standard minimum guarantee level included in Pension Credit.
Enterprise Investment Schemes (EIS)
Currently an individual can invest up to £1,000,000 in any tax year in an EIS, receiving income tax relief at 30%. This maximum limit will rise to £2,000,000 in any tax year, provided the surplus over £1,000,000 is invested in one or more knowledge intensive companies.
The personal allowance will rise to £11,850 in 2018/19. The higher rate threshold will increase to £46,350 (with the exception of Scottish tax residents). The zero percent starting band for savings income remains at £5,000.
Tax treatment of trusts
A consultation will be published in 2018 looking at ways to make the tax treatment of trusts simpler, fairer and more transparent.
This will be £20,000 for 2018/19. For Junior ISAs the threshold will rise in line with the CPI to £4,260.
Capital gains tax
The annual exemption will be £11,700 for individuals and £5,850 for trusts in 2018/19. For corporate investors, indexation relief (a relief for inflation) will be frozen, based on the Retail Prices Index (RPI) for December 2017. Corporate investors disposing of directly held investments such as shares and equity based collectives from 1 January 2018 will be impacted.
Stamp Duty Land Tax (not applicable in Scotland)
There will be no Stamp Duty Land Tax for first time buyers on properties valued at up to £300,000. Where the first time buyer purchases a property valued between £300,001 and £500,000, they won’t be taxed on the first £300,000 and will be subject to tax at 5% on the excess. Where the property is worth more than £500,000 they won’t receive any relief. These changes will apply to transactions on or after 22 November 2017, where the property will be their main residence.