Spring Budget 2021
4th March 2021
Spring Budget 2021:
Key Points for Savers & Investors
Personal Allowance increases to £12,570 and the threshold above which higher earners start paying 40% tax also increases to £50,270.
However, these allowances have then been frozen at these levels until 2025/26.
Standard lifetime allowance
The standard lifetime allowance for pensions will remain at £1,073,100. This level has also been frozen until 2025/26.
There are no changes to pension annual allowances (AA). The standard AA remains at £40,000 and the high income AA taper rules also remain unchanged.
Individual Savings Account (ISA)
The ISA annual subscription limit for 2021/22 will remain unchanged at £20,000.
Capital Gains Tax
The capital gains tax allowance will remain at £12,300 and is frozen at this level until 2025/26.
Inheritance tax rates and exemptions
The IHT Nil Rate Band will remain frozen at £325,000 until 2025/26. The Residence Nil Rate Band also remains frozen at £175,000 until 2025/26.
General Tax issues
Corporation Tax is increased to 25% from 2023/24 for Companies that make profits in excess of £250,000. Companies that make profits of less than £50,000 will maintain a Corporation Tax rate of 19%. Those companies that make profits between these two levels will pay a Corporation Tax Rate that is somewhere between these two rates, but that rate has yet to be announced.
National Insurance Contribution Tax threshold increases to £9,568.
Stamp Duty Holiday
The level at which Stamp Duty on house purchases is payable was increased from £125,000 to £500,000 last year. This Stamp Duty ‘holiday’ was due to end on March 31st 2021 and has now been extended until June 30th 2021. It will then be reduced to £250,000 and won’t go back to £125,000 until September 30th 2021.
If you would like to discuss your current financial planning arrangements in light of any of these changes to make sure you are maximising the opportunities now available to you, please do not hesitate to contact us.