Budget Allowance Increases

[GeoffF100]

The personal allowance and basic rate limit are increasing in 2019-20 and from 2021 to 2022 onwards, the Personal Allowance and basic rate limit will be indexed with the Consumer Price Index (CPI):

https://www.gov.uk/government/publicati ... om-2019-20

Unless, of course, something else happens.

[PinkDalek]

I’m the latest I’ve ever been to glance at the Budget but also from the Budget papers:

Capital gains tax – To better target private residence relief at owner occupiers, from April 2020 the government will reform lettings relief so that it only applies in circumstances where the owner of the property is in shared occupancy with the tenant. The final period exemption will also be reduced from 18 months to 9 months. The government will consult on these changes. There will be no changes to the 36 months final period exemption available to disabled people or those in a care home.

[Alaric]

the Personal Allowance and basic rate limit will be indexed with the Consumer Price Index (CPI):

Provided that wages and salaries increase faster than prices (and I suppose that is a "provided"), then over time more people drift into paying tax or higher rate tax. An earnings index might be better, but there's never been an explicit policy about what percentages should constitute "poor", where no tax is payable or "rich" where higher rates apply.

A high Personal Allowance also benefits those who retire early and can support themselves if needed from savings and investments.

[PinkDalek]

Keeping to Practical Issues:

https://www.gov.uk/government/collectio ... pact-notes

[PinkDalek]

https://www.gov.uk/government/publicati ... ar-2019-20

General description of the measure

This measure increases the Capital Gains Tax annual exempt amount to £12,000 for individuals and personal representatives and £6,000 for trustees of settlements for the period 2019 to 2020.

[daveh]

Of course those of us living in Scotland we won't know what is happening until the Scottish budget is announced in (I think) December. As I understand it the personal allowance is reserved to Westminster so we'll get the £12500, but the starting point for the different bands is determined here and the higher rate for earned income* is lower in Scotland, but we get the UK higher rate band for non earned income - not quite sure how that works.

I actually don't mind paying a bit more tax for better services, but I wish they hadn't made the situation so complicated with the proliferation of bands and odd complications like the higher rate band being complicated by whether the income is earned or unearned (ie from interest and dividends).