Budget 2013 - Talking Points from Wesleyan
- Details
- Published: Thursday, 21 March 2013 10:09
- Written by Tony Jacobs
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Taxation
Income tax
• The personal allowance (the amount at which people start paying tax), which is already set to increase to £9,440 on 6 April 2013, will increase by a further £560 in April 2014 to £10,000. The current basic rate band will be reduced to £32,010 from 6 April 2013 and will then reduce further to £31,865 in April 2014.
• The higher rate threshold will be £41,450 from 6 April 2013 and will be £41,865 from April 2014.
• It was previously announced in the 2012 Budget that the 50% top rate of income tax for those with income over £150,000 will be reduced to 45% from 6 April 2013. The dividend rate of tax for additional rate taxpayers will also reduce to 37.5%.
Capital Gains Tax
• The Capital Gains Tax annual exempt amount for 2013/14 tax year will be £10,900. This will increase to £11,000 in 2014/15 and then increase further to £11,100 in 2015/16.
Inheritance tax
• Plans to increase the Inheritance Tax nil-rate band from £325,000 to £329,000 in 2015 were cancelled. The Inheritance Tax threshold will stay at £325,000 until 2018.
Pensions
• From 2016/17, members of a defined benefit occupational pension scheme will no longer be able to contract out of the State Second Pension. This means that the rate of National Insurance that employers and members pay will increase.
• The flat-rate pension of £144 a week will start a year earlier in 2016.
• As previously announced in the 2012 Autumn Statement, the Government will reduce the Lifetime Allowance (LTA) for pension savings from £1.5 million to £1.25 million. The Government will also be introducing LTA protection against tax charges due to the reduction. Further details will be announced later this year.
• From 6 April 2014, the Annual Allowance will be reduced from £50,000 to £40,000.
Savings and Investments
• The Government will consult on options for transferring savings held in Child Trust Funds into Junior ISAs.
Employers and Business
• The main rate of corporation tax will fall to 20% from April 2015. It was previously announced that the rate will drop to 23% in April 2013 and to 21% in April 2014.
• From April 2014, every business and charity will be entitled to £2,000 Employment Allowance towards their employer National Insurance contributions bill.
Property
The Chancellor has introduced a new scheme called “Help to Buy”, that is designed to help people get onto or rise up the property ladder. The scheme will have two options:
• Option 1 - Equity Loan
- The Government will lend 20% of the value of a new build property through an equity loan which can be repaid when the house is sold.
- Buyers must raise a deposit of 5% and be buying a new build home.
- They will need a mortgage of 75% with a bank or a building society.
- The scheme will run for three years from 1 April 2013.
- Maximum purchase price is £600,000.
• Option 2 – Mortgage Guarantee
- The Government Guarantee aims to encourage mortgage lenders to offer more low-deposit mortgages.
- Applicable to new builds and existing homes.
- Buyers must raise a deposit of 5%.
- Available to existing homeowners and first time buyers.
- Available from January 2014 for three years.
- Maximum purchase price is £600,000.
Family Expenditure
• The Government will introduce a £72,000 cap on the costs of social care from 2016.
• The Government has announced a new Tax-Free Childcare Scheme, which is the equivalent of 20% of childcare costs up to a maximum of £6,000 for each child under 12 each year (a maximum of £1,200 per child).
• The planned fuel duty increase of 1.89p per litre due on 1 September 2013 has now been cancelled.
If you would like to find out more about how these changes may impact you, request a no-obligation appointment with one of Wesleyan's Financial Consultants:
Call: 0800 092 1990
Email:
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Visit:
www.wesleyan.co.uk
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