The tax year 2018/19 ends on Friday 5 April, which means it’s time to start planning for the new tax year and tie up the loose ends of the old one. Planning for the new tax year is now affected by the shift of the Budget schedule to autumn. The result is that changes announced in October, or in Scotland’s December Budget, have now passed into legislation in time for the new tax year. So, what does 2019/20 hold in store?
Full of useful information to have at your fingertips for the coming tax year. Please find attached Pembroke’s updated Tax Tables for the 2019/20 tax year. These tables are up-to-date with everything announced in Budget 2018, the Scottish Budget 2019 and subsequent updates, giving you all the key numbers in one place….
Future increases to the residence nil rate band might be in question, thanks to the OTS review of inheritance tax. Inheritance tax (IHT) will be slightly reduced for some from 6 April 2019, but greater reforms may well arrive soon. The reduction comes from the IHT residence nil rate band (RNRB) increasing by £25,000, bringing it to £150,000 for the 2019/20 tax year. In theory that means a married couple can pass on up to £950,000 (2 x nil rate band of £325,000 + 2 x RNRB of £150,000) to their heirs free of tax.
Changes to income tax, NICs and pension contributions are coming for 2019/20. One of the few certainties about 2019 is that the new tax rates and thresholds will take effect from the start of the 2019/20 tax year on 6 April and whilst the focus tends to be on year-end tax planning at this time of year, it is important to look forward to the new tax year and the changes that it will bring. From 2019/20 changes will come into effect for key income tax rates and thresholds, as well as pensions.
Two recent events have shone different lights on the government’s view of unmarried couples. As the graph shows, marriage has been drifting out of fashion for close to 50 years. There are now over 3.3 million unmarried couples in the UK, of which nearly half have children. In spite of this major social change, governments have largely maintained sharp legislative distinctions between the married and unmarried. When they have conflated the two, it is usually to swell the Exchequer’s coffers, for example when applying the high income child benefit charge to unmarried couples with children….
Imagine you are named as the executor and a beneficiary of your wife’s wealthy aunt. You learn that she is suffering from terminal cancer and has ‘a very impaired lifespan’. What do you do? This is what happened in the case of Nader and others v Revenue & Customs. The executor/beneficiary, a Dr Nader, decided to consult a leading firm of accountants about inheritance tax (IHT) mitigation options for Miss Dickins (the aunt). The accountants put forward an offshore trust-based scheme….
What should we expect from the 2018 Budget? Will the Chancellor turn to inheritance tax, fuel duty, stamp duty, a digital tax or something else to fund the NHS? The 2018 Budget has been set for Monday 29 October, setting a deadline for speculation and proposals. Mr Hammond, however – notwithstanding what his leader said at Conference recently – has indicated that he won’t end the long spell of austerity measures, despite improving public finances….
As inheritance tax (IHT) receipts hit a record for the Treasury, is it time to review your estate planning ahead of any changes in the Budget? 2017/18 produced record IHT receipts according to HMRC data published in July. The latest release of the annual statistics revealed IHT produced £5.228 billion for the Exchequer in 2017/18. That’s an increase of two thirds over just five years and, as the graph below shows, IHT revenue has been rising rapidly since Treasury receipts hit a low in 2009/10, owing to the combined impacts of the financial crisis and the introduction of the transferable nil rate band…
The long-term outlook for government finances suggests that tax increases are inevitable. The Office for Budget Responsibility (OBR) produces medium-term financial forecasts alongside the Budget and Spring Statement, but that is not its only task. It is also required to take a longer-term view of the public finances, producing a Fiscal Sustainability Report every two years. The latest version of the report was published in mid-July and did not make for comforting reading. This graph is a good summary
Who pays the most income tax? HMRC’s latest statistics provide an interesting insight into the income tax paying population. These figures reveal changes in the distribution of tax revenue over the last decade, with a growing share now coming from higher earners….