The recent Autumn Budget offered little in the way of earth-shattering giveaways or major changes for taxpayers and savers. But dig into the details and you’ll see that certain aspects of the Budget may affect your finances in 2018. Here we take a look at the key measures to be aware of.
Stamp duty has been slashed for first-time buyers
If you’re buying your first home, the Budget offered one big reason to be cheerful: stamp duty has been abolished for first-time buyers on purchases up to £300,000. But what if, like many first-time buyers looking in London or the commuter belt, you expect to fork out more than £300,000? In that case, you won’t pay stamp duty on the first £300,000 on properties up to £500,000. This measure is estimated to benefit 95% of all first-time buyers, with as many as 80% paying no stamp duty whatsoever. Unfortunately, there’s no change to stamp duty for non-first-time buyers.
The annual pension allowance is unchanged, but the lifetime allowance has increased in line with inflation
This Budget saw no major changes to pensions. The only minor change worth noting is that the lifetime allowance – the maximum you can amass in your pension without incurring an extra tax charge – will increase from £1 million to £1,030,000, as of 6 April 2018.
The ISA allowance remains frozen, except for junior savers
For 2018–19, the annual limit on what you can save into ISAs will hold firm at £20,000. However, the annual limit for Child Trust Funds and Junior ISAs will increase in line with inflation to £4,260.
Income tax thresholds will shift slightly
At the start of the next tax year, the personal allowance – the amount you earn before paying income tax – will increase from £11,500 to £11,850. And the threshold for higher-rate (40%) taxpayers will rise from £45,000 to £46,350. Both changes are in line with inflation.
Marriage Allowance rules, which allow taxpayers to transfer up to 10% of their unused personal allowance to their spouse or civil partner, have also been tweaked. Now, it will be possible to claim where a spouse or civil partner died before the claim was made, and this can be backdated by up to four years.
At Generation Financial Services, we work with individuals and families to deliver personalised financial advice, helping our clients achieve their personal and financial goals. To discuss your goals for 2018 and beyond, talk to our independent, expert advisers today.