The Chancellor delivered the last budget before Brexit on Monday 29 October - some say the change from a usual Wednesday was to avoid Halloween and ‘horror budget’ stories as the data clashed – but did he manage to achieve this? Here we pick up the highlights from the budget speech.
UK growth forecasts
Forecasts have been raised to 1.6% for 2019 with predications for 2020 and 2021 remaining at 1.4%.
Personal allowance will increase to £12,500 from April 2019 – one year earlier than expected (currently £11,850).
Higher rate threshold will also increase to £50,000 from April 2019 – again one year earlier than scheduled (currently £46,351).
These rates are proposed to increase annually by Consumer Prices Index (CPI) inflation thereafter.
Savings allowance 0% rate remains at £5,000.
Minimum wage will also rise by 4.8% from £7.83 to £8.21 in April 2019.
Capital Gains Tax (CGT)
CGT allowance will increase to £12,000 from April 2019 and to £6,000 for most trusts.
From April 2020, the Government will reform lettings relief so that it will only apply where the owner of the property is in shared occupancy with the tenant.
From April 2019, the minimum holding period throughout which the qualifying conditions for Entrepreneurs Relief must be met will extend from 12 to 24 months to support longer term business investment.
Lifetime allowance will increase in line with CPI to £1,055,000 from April 2019.
There were no changes announced to the annual allowance, tapered annual allowance or money purchase annual allowance.
Individual Savings Accounts (ISAs)
ISA allowance remains at £20,000 pa.
The annual allowance for Junior ISAs and Child Trust Funds for 2019/20 will be increased in line with CPI to £4,368.
First time buyers relief of shared ownership properties valued up to £500,000 in England and Northern Ireland are now exempt from stamp duty.
The change will only apply to relevant transactions with an effective date on or after 29 October 2018 but will also be backdated to 22 November 2017 so that those eligible who have not previously claimed first-time buyers relief will be able to claim a refund.
Enterprise Investment Schemes (EIS)
From 6 April 2020 the new Approved EIS Fund structure will be changed to focus on Knowledge Intensive Companies. This is subject to legislation and Brexit negotiations.
Business rate reductions
Business rates being reduced by one-third for retail properties with a rateable value below £51,000 for two years from April 2019: it is proposed this will benefit 90% of retail properties.
£900 million in business rates relief for small businesses and £650 million to rejuvenate High Streets.
However the Chancellor has warned there will be an Emergency Budget in the event of a no-deal Brexit on 29 March 2019.
If you would like to discuss any of these changes on your own circumstances, please contact your Dentons Wealth Independent Financial Adviser.