Next week sees the start of the new tax year 2019 – 2020, so we have summarised the key personal tax changes that will come into effect.
Personal Allowance: this goes up from £11,850 to £12,500. For most people, this will give a reduction in tax of about £130 per year.
Higher rate income tax threshold (the 40% tax rate) increases from £46,350 to £50,000.
Income tax rates are as follows: Basic, 20% rate is income up to £37,500; Higher, 40% rate is £37,501 to £150,000; and the Additional, 45% rate, is all income over £150,000
Other allowances are increasing as well, as follows: the married / civil partners allowance goes up to £8,915; the minimum married/civil partners allowance is now £3,450; the married/civil partners transferable allowance is £1,250; the income limit for married/civil partners allowance becomes £29,600; and the blind persons allowance is £2,450.
Inheritance Tax changes are limited to the Residence nil-rate band, which goes up to £150,000.
Student Loans: the Plan 1 threshold increases to £18,935, Plan 2 goes up to £25,725. The 9% rate of reduction stays the same.
ISAs: there is a small adjustment to the annual Child Trust Fund and Junior ISA savings limit, up to £4,260.
Workplace Pensions: The minimum contributions into the auto-enrolment workplace pension increases, with the total amount from both employer and employee must be a minimum of 8% of the qualifying earnings.
Capital Gains Tax (CGT) annual exempt amount increases to £12,000.
Non resident CGT: non UK residents will be brought into the CGT scheme for the first time if they dispose of UK land and property.
Property Tax: the gradual removal of interest relief for buy to let mortgages continues, down to 25% with a complete removal scheduled for 2020.
Company Cars: the benefit in kind tax rates are increasing for company cars, dependent on whether the car is petrol or diesel, and also dependent on CO2 emissions. For full information go here.
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