The annual allowance remains at £40,000 for 2020/21.
Tapered annual allowance
Threshold income is increasing from £110,000 to £200,000 and adjusted income from £150,000 to £240,000 for 2020/21.
The minimum level to which the annual allowance can taper down will reduce from £10,000 to £4,000. This means that all those with adjusted income of £312,000 or over will have an annual allowance of £4,000.
The lifetime allowance for pensions will increase from £1,055,000 to £1,073,100 for 2020/21.
Money purchase annual allowance
The money purchase annual allowance remains at £4,000 for 2020/21. This is the amount you can put in once you have flexibly accessed income from your pension.
Entrepreneurs who sell their business could face an increase to the amount of Capital Gains Tax (CGT) they may have to pay. Entrepreneurs relief means that CGT is payable at 10% on gains up to a lifetime limit. This limit is reducing from £10,000,000 to £1,000,000 with immediate effect. (11/03/2020)
Any capital gains on the sale of businesses which exceed the limit will be taxed at 20% for higher and additional rate taxpayers.
Capital Gains Tax
The annual capital gains tax allowance will increase to £12,300 for individuals (and personal representatives) and to £6,150 for trustees of settlements, for disposals in the 2020/21 tax year.
The personal allowance (the amount you earn before you have to start paying income tax) will remain at £12,500. For non-Scottish tax-payers, the amount people will have to earn before they pay tax at 40% will remain at £50,000. Full details can be found here.
As expected, the Inheritance Tax (IHT) nil rate band will remain frozen at £325,000 until April 2021.
The residence nil rate band will increase from £150,000 to £175,000 from April 2020, delivering on the Government’s commitment to allow some couples to leave an IHT-free inheritance of up to £1,000,000 to future generations. (£325,000 + £175,000 each)
The adult ISA annual subscription limit for 2020/21 will remain unchanged at £20,000.
The junior ISA annual subscription limit for 2020/21 will be uprated from £4,368 to £9,000.
The lifetime allowance ISA limit will remain unchanged at £4,000.