Devonshire May and June 18

MANAGING your MONEY
"the hardest thing in the world
to understand is income tax"
Albert Einstein
Celebrating 26 years of
providing independent
financial advice in Devon
Tax changes
for the new tax year
round up of key tax changes for the new tax year.
A
ISAs
Maximising ISAs is an increasingly
important tax planning area for
everyone. ISAs are especially
useful for those looking to produce
income because the income is
non-reportable for tax purposes.
Of particular relevance, is the
fact that the dividend allowance
(introduced in 2016-17) has fallen
from £5,000 to £2,000 which
may mean an increasing tax bill
for many people with reasonable
sized shareholdings. Using an
ISA will shelter dividends from
tax (7.5% over £2,000 for basic
rate tax payers and 32.5% for
high rate tax payers). Growth on
ISAs is free from Capital Gains Tax
(CGT) and this is again another
benefit because you will have
more flexibility with your holdings
within an ISA which will enable
you to make switches without
reference to Capital Gains Tax.
The maximum ISA investment for
the 2018-19 tax year is £20,000 per
person.
If you have an existing
share portfolio or investment
funds which are not in an ISA
then these assets have to be
crystallised before moving into
the ISA wrapper and it`s important
at this stage to consider any Capital
Gains Tax before transacting a
bed and ISA.
Taking up an ISA may be particularly
important for couples because the
new ISA rules (effective from 6th
April this year) are more generous.
Since April 2015, investors have
The personal
allowance has
risen by £350 to
£11,850 in this tax
year
been able to pass on their ISA to
their spouse or civil partner on
death by being granted a oneoff
extra allowance called an
Additional Permitted Subscription
(APS). The value of this allowance
was based on the value of the ISA
on the date of death which did
not take account of any growth
between the date of death and the
granting of probate. This meant
that the surviving spouse may, in
some circumstances, have been
unable to wrap all the probate
proceeds in an ISA. From this tax
year, the APS will normally be
the value of cash or investments
passed on or the value of the ISA
at the date of death, whichever
is higher.
Income Tax
The personal allowance has risen
by £350 to £11,850 in this tax year
and the basic rate limit is now
£34,500. The zero starting band
for savings will remain the same as
well as the £50,000 for child benefit
tax charge and £100,000 threshold
for phasing out the personal
allowance. £150,000 will remain
the starting point for additional
rate tax and will, once again be
frozen for this tax year. Don`t
forget to claim married couples
allowance (if there is a spouse
born before 6th of April 1935) or
the married couple's transferrable
tax allowance (subject to certain
qualifications). Please note you
can`t claim both allowances.
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IHT
Helen Mulvaney
BA (Hons), Dip M, DipPFS
Proprietor of
RICHMOND INDEPENDENT
Helen has been advising
clients in the East Devon
for the past 26 years and
specialises in the provision
of retirement and
investment advice.
richmondindependent.co.uk
The nil rate band remains frozen at
£325,000 since 2009 and will remain
so until at least April 2021. The Main
Residence Nil Rate Band (MRNRB)
which was introduced last tax year,
will increase by £25,000 this tax year
to £125,000 and is currently set to
increase by £25,000 each year until
the tax year 2020/21 when it will
reach £175,000. Although this new
tax band is useful, UK property has
risen by around 37% since 2009*
and as a consequence in 2016/17
IHT raised more than twice the tax
revenue than it did in 2009/10.
National Insurance
The contribution thresholds will rise
this year marginally, whilst there is
no change in the main employee
and employer rates . Class 2 (for
the self-employed) will be £2.95
per week for 2018-19 and then will
disappear completely for the tax
year 2019/20.
helen@richmond-ifa.com
01395 512166
Helen Mulvaney
*source - Nationwide building society
Richmond Independent is a trading name of
Investment & Financial Solutions Partnership
LLP which is authorised and regulated by the
Financial Conduct Authority
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