The Autumn Budget contained a number of changes and announcements in pensions, estate planning and personal tax that are relevant to Canada Life’s advisers and their clients.
The Key Changes
The pension annual allowance and money purchase annual allowance will remain the same and the Lifetime Allowance will increase in line with CPI.
The Department for Work and Pensions will consult in 2019 on the function of the pensions charge cap to ensure that it does not unduly restrict the use of performance fees within default pension schemes, while maintaining member protections.
The Government reconfirmed its commitment to consult on the Pensions Dashboard, and they also published a white paper on boosting pensions for the self-employed. The ban on pensions cold calling is expected in the Autumn of this year.
Inheritance tax receipts are forecast to rise from £5.2bn in 2017/18 to £6.9bn in 2023/24, an increase of 32.7%. The Government will legislate to amend the residence nil-rate band (RNRB). These amendments clarify the downsizing rules, and provide certainty over when a person is treated as ‘inheriting’ property.
Personal tax, savings and investments
From April 2019, the personal allowance will increase to £12,500 and the higher rate threshold to £50,000. Scotland may have different rates and thresholds.
The ISA annual subscription limit for 2019-20 will remain unchanged at £20,000. The annual subscription limit for Junior ISAs and Child Trust Funds for 2019-20 will be uprated in line with CPI to £4,368.