Following the Budget, you may be wondering how to mitigate increased exposure to tax rises. For people after financial advice in Cheshire or Oswestry, the following five tips may help lessen the impact on your assets.
Whilst the £20,000 annual limit on deposits into tax-efficient accounts still stands, the rules change for under-65s from April 2027. Thereafter, Isa cash is capped at £12,000 whilst any other money must be allocated to a stocks and shares Isa. There is still time before these changes take effect, so financial experts have suggested it might be prudent to maximise existing allowances whilst you can, and shop around for attractive rates.
Income tax rose on share dividends, and the ordinary and upper rates will go up to 10.75% and 35.75% respectively for people who already used up their income tax personal allowance or annual dividend allowance. To avoid this, you could transfer investments into an Isa, subject to your £20,000 allowance.
Employees’ ‘salary sacrifices’ over £2,000 per annum will no longer be exempt from National Insurance payments from 2029. Until then, people in this position might wish to assess whether it is worth paying more.
With more people being dragged into inheritance tax, you might want to assess gifting options. The Budget extended the threshold freeze until April 2031. Cash or assets worth up to £3,000 can be given away without being added to an estate’s value.
Finally, the new ‘mansion tax’ will impact properties valued at over £2 million. It is worth noting that the housing market is unpredictable, and some analysts estimate there could be a 5-10% correction in property valuations.
