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The Lowdown On The Budget

The lowdown on the Budget

Can you believe we actually had a Budget last month? Whilst it seems like a distant memory, there were some key points and changes that will have an effect over the long term. A quick summary of anything we deemed important is below:


Tapered Annual Allowance – This was raised by £90,000 (adjusted income to £240,000 and threshold income to £200,000) and means that high earners, such as those in the NHS, will be less affected by tapering. However, the minimum that the taper can now be reduced to is £4,000 instead of £10,000, so those with income above £312,000 will only be able to put in £4,000 into a pension per year.

Annual Allowance – Remains at £40,000.

Lifetime Allowance – This continues to be increased by CPI and will be £1,073,100.

Income Tax

Allowances & Tax Bands – No changes to the personal allowance which remains at £12,500 or tax bands, with the higher rate remaining at £50,000 and the additional rate at £150,000.

National Insurance

Thresholds – The threshold at which employees will begin paying class 1 National Insurance increases from £8,632 to £9,500

Capital Gains Tax

Allowance – The annual Capital Gains Tax allowance will increase to £12,300 for individuals and to £6,150 for trustees of settlements.

Inheritance Tax

Nil Rate Band – Not surprisingly this will remain frozen at £325,000 until April 2021.

Residential Nil Rate Band – This will increase from £150,000 to £175,000 as intended.


ISA – Remains at £20,000.

JISA – This will increase from £4,368 to £9,000.

Entrepreneurs’ Relief

Lifetime Limit – Entrepreneurs’ Relief means that Capital Gain Tax is payable at 10% on gains up to a lifetime limit. This limit is reducing from £10,000,000 to £1,000,000 with immediate effect. Any capital gains on the sale of businesses that exceed the limit will be taxed at 20% for higher and additional rate taxpayers.

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