THE AUTUMN BUDGET 2021

TODAY’S BLOG

THE AUTUMN BUDGET 2021

In terms of your personal finance, not a lot has changed. Indeed, most of the announcements merely confirmed previous announcements, such is the way of our politicians. As a reminder, the next tax year begins on 6th April 2022. The main changes for most are really for those that receive dividends or pay National Insurance

iNCOME TAX RATE ON DIVIDENDS 2022/23 2021/22 (NOW)
Basic rate taxpayer 8.75% 7.50%
Higher rate taxpayer 33.75% 32.50%
Additional rate taxpayer 39.45% 38.10%
Rate for Trusts 39.35% 38.10%

National Insurance for employers increases from 13.8% to 15.05% which basically makes it more expensive to employ people. Employees will also pay rather more at the main rate, rising from 12% to 13.25% and then at the upper or higher rate increased from 2% to 3.25%. Remember the thing about National Insurance is that there is a threshold for the main rate after which you simply pay a flat, reduced rate (currently 2% but increasing to 3.25%). The self-employed main rate increases from 9% to 10.25%. Self-employed people do not fully enjoy the same benefits for their NI payments.

MAIN ALLOWANCES

For those of you using your pensions, the annual allowance remains at £40,000 but if you have begun drawing income from investment-based pensions it is restricted to £4,000 the delightfully named “Money Purchase Annual Allowance” or MPAA. The Lifetime Allowance (the total value of your pensions permitted before excess charges) remains frozen as previously indicated at £1,073,100. This is equivalent to a pension income of £53,655.

ISA and JISA limits remain as they were (£20,000 and £9,000) which are fairly substantial allowances but indicate a “kick the can down the road” policy of Government worrying about tax in the future. Capital Gains Tax (CGT) allowances and rates remain as they are (which is daft).

If you own a second property or inherit one, the capital gains rate and requirement for payment are important to understand. However, one small improvement is that you now have 60 days to pay the liability rather than 30 (with immediate effect). I imagine one of Rishi’s friends was offloading and was worried about an extra charge (surely not!).

As for inheritance, the nil rate remains at £325,000 per person and those with children inheriting the family home the residential nil rate band adds a further £175,000. However, this is tapered when an estate is worth more than £2m.

In short, for all the bluff and thunder and 200 pages, not much is in it for you and I. Remember – death and taxes.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk 
Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk    Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

THE AUTUMN BUDGET 20212023-12-01T12:13:01+00:00

CHANGES FOR TRUSTEES

TODAY’S BLOG

CHANGES FOR TRUSTEES

A series of government moves over the past few decades have reduced their tax advantages and made trusts much less attractive to wealthy families. They are likely to become less popular still from March, when a new requirement will force thousands more trustees to list on a government register that is partially open to the public, or risk penalties.

Since 2017, certain types of trusts have had to report information to a government online register called the Trusts Registration Service (TRS). This came into being as result of an EU-wide directive to tackle money laundering. Far be it from me to imply or suggest that motivation for Brexit had anything to do with circumventing new EU Anti-money laundering rules!

To comply with the rules, all UK trusts that have to pay a tax liability such as capital gains tax (CGT), income tax, inheritance tax or stamp duty must report information to the register.

Trusts that are outside the UK but trigger UK tax must also do so, as must all trusts that are required to fill out a self-assessment tax return anyway. Currently the register is not publicly available, with access limited to law enforcement authorities. But from March 2020, the next phase of the EU directive (the fifth Anti Money-Laundering Directive) is set to increase the number of trusts that must submit reports.

It will also partially open up the register to the public, including journalists, leading some to worry about an erosion of privacy. Despite the UK’s imminent departure from the EU, the government is committed to implementing the directive and passing it into domestic law. Tax experts warn that hundreds of thousands of trustees and beneficiaries could be affected and need to understand better the possible impact of the changes.

TRUSTS & MONEY LAUNDERING

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk 
Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk    Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

CHANGES FOR TRUSTEES2023-12-01T12:16:59+00:00
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