The recent general election result of the 8th June 2017 means that the United Kingdom now has a minority government led by the Conservatives. So, what does this result mean for your personal finances and how will it affect you?
At this point in time, no laws, policies or regulations have changed. However, now would be a great time to focus on your personal finances and see how you can make them work for you to the best advantage.
What might change following the election result?
Reduction in the tax-free dividend allowance
The government may choose to reinstate plans to reduce the tax-free directors’ and shareholders’ dividend allowance from £5,000 to £2,000. The new regime was set to come into force in April 2018 and meant that a basic rate tax payer who receives £5,000 in dividends will have to pay an extra £225 tax from April 2018, and a higher rate tax payer will pay an extra £975. If reintroduced, this change will mainly affect savers with larger investments and small business owners who take income from their businesses as dividends.
Revisions to the Money Purchase Annual Allowance
The Money Purchase Annual Allowance (MPAA) was set to fall from £10,000 to £4,000 from the 6th April 2017. This policy, which was dropped when the Finance Bill was pushed through, may also be reinstated following the election.
Funding for social care
One of the most controversial topics during the election campaign was the Conservative party’s plan for social care. There is now much uncertainty on how much individuals will be expected to fund their care and how this will be done.
Finally, we’re all waiting to hear the outcome of Brexit negotiations as this is set to have the biggest effect on your tax demands and general financial position. The deal which is reached with the EU and the subsequent trade deals with other countries will determine the financial outlook not just for individuals but for the entire country for many years to come.
Get in touch to find out more about our range of financial planning services
For more information about how the general election results could affect you or for a review of your own personal financial circumstances in these uncertain times, please call Springfield Financial Services on 01772 729742 or complete our online enquiry form.