Hi everyone,
Here’s my roundup concerning George Osborne’s 2013 budget yesterday and how it relates to pensions, tax, savings and investments. I hope it helps you see what you need to know…
- Pension Drawdown: The limit has been restored to 120%.
- Pension Allowances reduced from £50,000 to £40,000.
- New Flat Rate State Pension of £144 a week starts 2016
- Inheritance Tax Freeze until 2017/2018—£325K (£650K couples)
- Annual ISA Allowance increases to £11,520.00
- Stamp Duty Land Tax reduces; 15% to 7%—properties £2M+
- Tax-Free Childcare Scheme from 2015—up to £1200 per child
- Inheritance Tax Avoidance clampdown—GAAR kicks in
- Income Tax: Personal Allowance up, basic rate band down
Pension Drawdown: 20% boost starting new week on 26 MARCH 2013. This means that by restoring the limit to 120%, income drawdown has been brought more into line with annuity rates, which is a good thing.
Pension Allowances: The pension annual allowance reduces to £40,000 and the lifetime allowance is cut to £1.25M starting with the 2014/2105 tax year.
However, move quickly because the “real” deadline is 6 APRIL 2013. This is because any contributions made after this date will suffer the reduced rate due to being in what is known as “The Pension Input Period” (PIP) that ends in the tax year 2014, (not the actual tax year if that makes sense). Please do contact your Financial Adviser for more detail on this if required.
