A number of new rates and allowances as well as some changes to tax rules have been introduced on 6 April 2017.
Here is an overview of some of the main changes for 2017/18 affecting personal finances.
The personal allowance is £11,500 for 2017/18 and the basic rate limit is £33,500. The basic rate limit for Scotland is £31,500.
An additional residence nil-rate band is available to those passing on a main home to a direct descendant.
The allowance starts at £100,000 and is an addition to the existing tax-free inheritance tax allowance of £325.000. It will increase by £25,000 each tax year until it reaches £175,000 in 2020/21.
Capital Gains Tax
Capital gains tax exemption for individuals is £11,300 and £5,650 for trusts.
After this, gains are taxed at the following rates:
- basic rate taxpayers – 10%
- higher and additional rate taxpayers – 20%.
Residential property and carried interest are taxed at 18% (basic rate) and 28% (higher and additional rate).
Residence And Domicile
Anyone who has been a resident in the UK for 15 of the last 20 tax years will be considered domiciled for tax purposes. A person will become domiciled on the 16th year.
The remittance basis of taxation will no longer be an option and that a person will no longer be able to become a non-dom on a permanent basis.
The deemed-domicile status replaces the permanent non-dom status. This will include years of residence while the individual is under the age of 18.