Only An April Fool Leaves It Too Late – Happy New Tax Year!
As 2016 starts to fade away thoughts turn to planning for 2017. Most of the changes highlighted below won't come into effect until April, but now is the time to start planning try to avoid the tax year end panic.
Income tax - hurrah
Personal allowance is £11,500 for 2017/18. The higher rate threshold will increase from £43,000 to £45,000. The higher rate threshold in Scotland is due to be £43,430.
Corporation tax - hurrah
Corporation tax rate reduces to 19% from 1 April 2017.
Auto-enrolment staging dates - hurry up
Smaller firms and new firms will start auto-enrolment in 2017. The process takes time so if a business is yet to begin the process, now is the time to start planning.
Mortgage Interest relief for landlords - some planning required
Relief on finance costs, including mortgage interest payments, available to individual landlords of residential property will be restricted to the basic rate of tax.
This restriction will be phased in over a 4-year period, starting from April 2017.
ISAs - hurrah
The annual ISA saving limit will be £20,000 (or £4,128 for Junior ISAs) for 2017/18.
The Lifetime ISA, which is designed to help people save for retirement or a first home, will be launched in April 2017.
Inheritance tax - hurrah - and time to review wills and trusts
The residence nil-rate band of up to £100,000 per person will be introduced for 2017/18. This is set to increase in future tax years.
There may of course be some more changes as these issues travel through the legislative process but this is just some initial food for thought and of course nothing beats a thorough chat with your financial adviser to get the year off to a productive and organised start.
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Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.
This blog was posted some time ago and its contents may now be out of date. For the latest legal position relating to these issues, get in touch with the author - or make an enquiry now.