We are heading towards another Autumn Statement 0n 22 November 2023, but what about tax changes which have already been announced?
Capital Gains Tax Allowances
When you sell an asset and make a profit, if capital gains tax is due, allowances of £12,300 used to be available. For the current year to 5 April 2024, these have been reduced to £6,000 and from 6 April 2024, further reduced to £3,000. This equates to a potential tax increase in excess of £2,500.
Income Tax Allowances and Thresholds
Allowances and lower rate bands have been frozen and so with income increasing, salary and interest, you are likely to pay more tax.
The additional rate threshold has been reduced, meaning tax will be charged at 45% on income above £125,140. This will mean higher rate taxpayers will now pay an extra £1,200 tax on income between £125,140 and £150,000 (being the old threshold).
The dividend allowance, which has been £2,000 for a number of years, has been cut to £1,000 for 2023/24 and will be further cut to £500 for 2024/25.
On a more positive note, the pension annual allowance has increased to £60,000 from £40,000 for 2023/24. This gives a potential tax saving of between £4,000 to £5,000 depending whether you are a higher rate taxpayer or additional rate taxpayer.
Making pension contributions can also help you save the personal allowance, which would normally be restricted on income above £100,000, giving an even bigger tax saving.
These are just a few of the changes which will impact your tax position for the current and future years. If you would like advice about your tax position, please contact our dedicated Tax Team on 01376 326266.
The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.