The limit for contribution into an Individual Savings Account (ISA) remains the same with £20,000. For Junior ISAs the limit remains the same at £9,000, this rate also applies to those with existing Child Trust Funds.
Capital Gains Tax
Capital Gains Tax is a tax payable when you make a profit from disposing of an asset whether it is by way of selling it, giving it away as a gift or exchanging of the asset. Exemption applies to certain assets but otherwise if the overall gain is above your annual tax-free allowance, the tax rates are applicable at 10%, 18%, 20% and 28%. The rate varies depending on whether the gain is on assets, property, if you are a basic rate, higher or additional rate taxpayer and whether you are acting as a trustee.
The annual exempt amount for an individual this tax year is £12,300 but from 6 April 2023 it will be reduced to £6,000. The exemption is due to reduce again to £3,000 in the tax year 2024/25.
There is still time to utilise your allowance for this tax year but you must be quick. For estate planning we regularly work with financial advisors and tax advisors to ensure you explore all planning options available to you.
The budget announced that for disposals on or after 6 April 2023 the no gain/no loss provision will now be extended for up to 3 years from the date they cease living together. There is also provision to allow for an unlimited period for the no gain no loss provision to apply to any transfer of assets under a divorce agreement, as well as utilising private residence relief for any parties retaining an interest in the former matrimonial home.
Annual Allowance (AA) is the amount you can contribute to your pension during a particular year. From 6 April 2023 the AA will be increased from £40,000 to £60,000. If your income exceeds the AA tapering applies.
The Lifetime Allowance (LTA) is the sum you can accumulate in your pension during your lifetime without having to pay a tax charge. It was announced that from 6 April 2023 the tax charge will be removed.
When did you last look at your pension? If you are trying to reduce your taxable estate, have you thought about contributing further into your own pension or to contribute to a child or grandchild’s pension? Speak to your financial advisor to obtain the necessary advice and see whether it may be beneficial.
Up to 30 hours of free childcare will be available to working parents of children from the age of nine months by September 2025. Initially, from April 2024, working parents of two-year-olds will be able to access 15 hours of free childcare per week.
After a scary year for us all of with rapidly increasing living costs, it is a positive note to hear that The Office for Budget Responsibility forecasts that the CPI inflation rate will fall from the current 10.1% (January2023) to just 2.9% by the end of the year.
How can Hanne & Co help?
If you would like to discuss the above in more detail, contact our Private Client department on 0207 228 0017 today to find out more.