Allowances and Changes in 2018/2019
With the end of the tax year looming it gives us the opportunity to outline the different allowances for pensions, ISAs and other important information that individuals may need to be made aware.
Please ensure that where possible you or your clients fully utilise any unused allowances before the end of the tax year.
| 6th April 2017 to 5th April 2018 | 6th April 2018 to 5th April 2019 | |
|---|---|---|
| Annual Allowance | £40,000 | £40,000 |
| Money purchase Annual Allowance | £4,000 | £4,000 |
| Lifetime Allowance | £1,000,000 | £1,030,000 |
| Basic State Pension (per week) | £122.30 | £125.95 |
| Basic Flat Rate State Pension | £159.55 | £164.35 |
| Adult ISA subscriptions | £20,000 | £20,000 |
| Junior ISA subscriptions | £4,128 | £4,260 |
| Lifetime ISA subscriptions | £4,000 | £4,000 |
| UK Personal Allowance | £11,500 | £11,850 |
| Scottish Personal Allowance* | £11,500 | £11,850 |
| Capital Gains Threshold | £11,300 | £11,700 |
| Personal Savings Allowance | Basic – £1,000 Higher – £500 Additional – £0 | Basic – £1,000 Higher – £500 Additional – £0 |
| Dividend Allowance | £5,000 | £2,000 |
| Inheritance Tax nil rate band | £325,000 | £325,000 |
| Additional residence nil rate band | £100,000 | £125,000 |
*for full Scottish tax bands please see our blog titled Scottish Income Tax 2018/2019.
One rule which is to change with effect from 6th April 2018 relates to the death benefits for ISAs, also known as additional permitted subscriptions (APS). APS was introduced in April 2015 in respect of deaths that occurred on or after 30th December 2014 that when an individual dies the value of their ISA, at date of death, is added to the spouse’s own subscription limit. The disadvantage was that any gains made to the ISA after date of death would be liable to tax.
With effect from 6th April 2018, this changes and the ISA of the deceased will remain in a tax free wrapper until probate has been granted instead of date of death.
