{"id":3949,"date":"2023-03-15T16:17:04","date_gmt":"2023-03-15T16:17:04","guid":{"rendered":"http:\/\/www.wealthatwork.co.uk\/jpm\/?p=3949"},"modified":"2023-03-15T16:21:12","modified_gmt":"2023-03-15T16:21:12","slug":"spring-budget-commentary-2023","status":"publish","type":"post","link":"https:\/\/www2.wealthatwork.co.uk\/jpm\/2023\/03\/15\/spring-budget-commentary-2023\/","title":{"rendered":"Spring Budget Commentary 2023."},"content":{"rendered":"
[vc_row][vc_column][vc_single_image image=”10409″ img_size=”full”][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]The Chancellor of the Exchequer, Jeremy Hunt, has today delivered his Budget Statement.<\/p>\n

Pensions<\/strong><\/p>\n

It was widely reported in the press yesterday that the Chancellor would announce that the pension Lifetime Allowance (LTA) would rise from the present \u00a31,073,100 to \u00a31,800,000.\u00a0 However, in a surprise announcement, the Chancellor has decided to abolish the allowance altogether.<\/p>\n

The LTA was the amount of pension you can save before you are taxed on it.\u00a0 Any amount you have in your pension above the LTA was subject to a tax charge of up to 55%.\u00a0 This charge will be removed from 6 April 2023 before fully abolishing the LTA from April 2024.\u00a0 The maximum Tax-Free Cash Lump Sum for those without LTA protections will be retained at its current level of \u00a3268,275 and will be frozen thereafter.<\/p>\n

Its abolition will be welcome news for many pension savers who can continue to save or draw their pension benefits without being concerned about this penal charge.\u00a0 It will also remove the financial disincentive which was affecting many senior doctors and consultants in the NHS who had been reducing hours or retiring early, as the tax charges outweighed the benefits.<\/p>\n

In addition, it has been announced the Annual Allowance for pension contributions, which has been subject to much of the same debate, will rise from \u00a340,000 to \u00a360,000 and individuals will continue to be able to carry forward unused Annual Allowances from the 3 previous tax years.\u00a0 Furthermore, the Money Purchase Annual Allowance, which limits the amount people can put into their pension tax-free after accessing their pot, is also set to rise from \u00a34,000 to \u00a310,000.\u00a0 The minimum Tapered Annual Allowance will also increase from \u00a34,000 to \u00a310,000 from 6 April 2023 with the adjusted income threshold for the Tapered Annual Allowance set to be increased from \u00a3240,000 to \u00a3260,000.<\/p>\n

Paul Morton, Investment Planning Director, comments:<\/strong> \u201cPensions have previously suffered from a \u2018cap\u2019 (LTA) and \u2018collar\u2019 (AA) structure, i.e. the amount you could build up in a pension was being squeezed from two angles. Removing the \u2018cap\u2019 and loosening the \u2018collar\u2019 allows a bit of breathing room and is a step towards a simpler system for pensions.\u201d[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]Income, capital gains and savings taxes<\/strong><\/p>\n

From an income tax rates and tax thresholds point of view, these were set at the Autumn Statement when Mr Hunt announced all would remain frozen until 2027\/28.<\/p>\n

As a reminder, set out below are the tax rates and thresholds for England, Wales and Northern Ireland from 2023\/24:[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column width=”2\/3″][vc_single_image image=”10630″ img_size=”full”][\/vc_column][vc_column width=”1\/3″][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]*<\/strong>your Personal Allowance may be greater than \u00a312,570 if you claim Marriage Allowance or you are eligible for the Blind Person\u2019s Allowance.\u00a0 It can also be reduced for high earners (earning more than \u00a3100,000) and is zero if your income is \u00a3125,140 or above.[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]Dividend tax allowance<\/strong><\/p>\n

You only have to pay tax if your dividends exceed the dividend tax allowance in the tax year. This is currently \u00a31,000 and will be cut to just \u00a3500 from April 2024.<\/p>\n

The tax you pay depends on your income band \u2013 please note, you must add your dividend income to any other taxable income to determine the rate of tax you will pay.[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column width=”1\/2″][vc_single_image image=”10607″ img_size=”full”][\/vc_column][vc_column width=”1\/2″][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]Capital Gains Tax (CGT)<\/strong><\/p>\n

The Annual Exempt Amount for capital gains tax will be cut from \u00a312,300 to \u00a36,000 from April 2023 and then halve again to \u00a33,000 from April 2024.<\/p>\n

Above this, CGT will continue to be paid at 10% (18% for second properties or buy to let) if the chargeable gain fell within an individual\u2019s basic rate band. Any gain that is above an individual\u2019s basic rate band will be charged at 20% (28% for second properties or buy to let).[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]Personal savings allowance<\/strong><\/p>\n

This was first introduced in 2016 and applies to savings income such as interest on savings accounts, gilts or corporate bonds.\u00a0 The allowance remains at \u00a31,000 for basic rate tax payers and \u00a3500 for higher rate tax payers.[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column width=”5\/6″][vc_single_image image=”10991″ img_size=”full”][\/vc_column][vc_column width=”1\/6″][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]ISAs<\/strong><\/p>\n

The ISA allowance subscription limit for 2023\/24 will remain unchanged at \u00a320,000 and the annual subscription limit for Junior ISAs and Child Trust Funds will remain at \u00a39,000.[\/vc_column_text][\/vc_column][\/vc_row]\n <\/div> ","protected":false},"excerpt":{"rendered":"

The Chancellor of the Exchequer, Jeremy Hunt, has today delivered his Budget Statement.<\/p>\n","protected":false},"author":1,"featured_media":4031,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"_links":{"self":[{"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts\/3949"}],"collection":[{"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/comments?post=3949"}],"version-history":[{"count":22,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts\/3949\/revisions"}],"predecessor-version":[{"id":4029,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts\/3949\/revisions\/4029"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/media\/4031"}],"wp:attachment":[{"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/media?parent=3949"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/categories?post=3949"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/tags?post=3949"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}