Summary of changes to non-corporate taxes

Personal taxes

The income tax personal allowance (how much you can make without paying any income tax) is to increase to £11,500, and the threshold for the 40% higher rate of income tax is to increase to £45,000 (£43,000 in Scotland).  The Government is committed to raising the income tax personal allowance to £12,500 and the higher rate threshold to £50,000.  It is worth noting that the personal allowance is withdrawn for incomes over £100,000, and the High Income Child Benefit Charge remains in place for those earning more than £50,000.

Capital Gains Tax

The Capital Gains Tax annual exemption threshold is being increased to £11,300.

 Inheritance taxes

The threshold for inheritance tax is currently frozen at £325,000 until April 2018.  Coming into effect is a policy announced in George Osborne’s July 2015 Budget Statement, which details a tax-free allowance for inheritance tax on family homes, starting this year and rising by £50,000 until it reaches £1million overall.  Once the estate is worth over £2million, the £1million tax-free allowance is gradually tapered away.  However, all residential property indirectly held through an offshore structure will be liable to inheritance tax. 

 Individual savings accounts (ISAs)

The maximum limit of payment into an ISA will jump from £15,240 to £20,000 for the 2017-2018 tax year.  A newly-introduced Lifetime ISA will allow under-40s to save up to £4,000 per year, with a 25% bonus from the government to fund first-time property purchase or to save for retirement.