On Thursday 5 December 2013, the Chancellor presented his 2013 Autumn Statement. Below is a summary, highlighting some of the key points:
Personal Allowance – From 6 April 2014, the income tax personal allowance will increase to £10,000. An increase of £560.
Age-Related Allowances – are frozen at £10,500 and £10,660 for those born before 6 April 1948 and 6 April 1938, respectively. As the personal allowance increases, the additional age related allowances will be phased out.
Basic Rate Threshold – reduces to £31,865. Those entitled to the full standard personal allowance will pay 40% tax on income above £41,865. The threshold for higher rate income tax, therefore, increases by £415.
Married Couple’s Allowance (MCA) – will increase to £8,165 (minimum £3,140) with effect from April 2014. Relief is restricted to 10%. MCA is only available where one spouse/civil partner was born before 6 April 1935.
Transferable Tax Allowance – from 6 April 2015, up to £1,000 of the unused personal allowance can be transferred from one person to their spouse or civil partner, provided that neither pays higher rate tax. See November’s article for further detail.
Tax Efficient Investment:
Individual Savings Accounts (ISA) – the individual annual ISA subscription limit rises from £11,520 to £11,880 (£5,940 for cash ISAs) from 6 April 2014.
Junior ISA – the subscription limit is increased to £3,840 for 2014/2015. The same limit applies to Child Trust Funds (CTF).
Capital Gains Tax – From 6 April 2014 the annual exempt amount will increase to £11,000. Trustees will be entitled to a maximum of £5,500.
Tax Relief – no changes to pension tax relief were announced, however the reduction in the lifetime allowance to £1.25m and annual allowance to £40,000 will go ahead as previously announced.
Carry Forward – continues to be available for the preceding 3 years to utilise unused tax relief up to £50,000 pa.
Individual Protection 2014 – can be applied for from 6 April 2014 giving individuals a personal lifetime allowance of the value of their pension benefits on 5 April 2014, capped at £1.5 million. It is only available to those with pension savings of more than £1.25 million on 5 April 2014.
Should you wish to discuss any of the above changes and how they affect your circumstances, please contact a Chartered Financial Planner at Springfield Financial Services on 01772 729742.