There is no change to the Annual Allowance which remains at £50,000. As previously announced the Lifetime Allowance is reducing to £1.5m from £1.8m with effect from 6th April 2012.
The Basic State Pension will rise from £102.15 to £107.45 per week for a single person and from £163.35 to £171.85 per week for a married couple.
The State Pension Age (SPA) will rise from 66 to 67 from 2026 eight years earlier than planned. The SPA will be increased in future to take account of improved longevity rates.
With effect from 6th April 2012 it will no longer be possible to contract out of the State Second Pension (S2P) using a money purchase style pension arrangement, such as a personal pension for example.
Capital Gains Tax (CGT)
The CGT exemption allowance will be frozen at the current £10,600 for tax year 2012 / 2013. With effect from April 2013, the Consumer Price Index (CPI) will be used as the measure for increasing the allowance.
Rates of CGT remain the same at 18% for basic rate taxpayers and 28% for higher rate taxpayers and for trusts.
Individual Savings Accounts (ISAs)
The ISA subscription limits are increasing from 6th April 2012 to £11,280 overall and £5,640 for cash ISAs. The Junior ISA limit remains at £3,600 until April 2013 when it will increase in line with CPI, as is the case with the main ISA threshold.
Seed Enterprise Investment Scheme (SEIS)
A new tax advantaged product, SEIS, will be available allowing investment in fledgling companies. The main tax reliefs will be:-
50% income tax relief (compared with 30% with an Enterprise Investment Schemes (EISs) and Venture Capital Trusts (VCTs))
CGT exemption on both gains made within the SEIS and on gains invested into the SEIS (compared with a deferral of CGT on gains invested in EISs)
The above combination of tax relief means a higher rate tax payer would secure relief at 78% (50% income tax relief and 28% CGT relief) on investments up to a maximum of £100,000.
Inheritance Tax (IHT)
There is no change to the IHT exemption threshold of £325,000. From 6th April 2012, the Government will introduce a reduced rate of IHT of 36% from 40% for estates leaving 10% or more to charity.
A higher rate of 7% will apply on purchase of residential properties valued at more than £2m which will be increased to 15% if purchased via a company.
Should you have any queries, or wish to discuss the effects of the recent Budget on your personal financial planning please do not hesitate to contact us to discuss your requirements.