The Budget was cancelled due to the election and the vote is tomorrow. It is often difficult for us to advise clients on significant tax planning opportunities at such a time of political uncertainty. Whatever the outcome of the election, tax laws will change and that could impact upon each of us in years to come.
That said we are still presented with circumstances that allow us to take advantage of current tax rules and allowances which are of benefit.
One area for change that has been mooted previously is a suggestion to restrict tax relief on pension contributions. Therefore,, if you were intending to make some pension contributions in the current tax year, it may be worth accelerating them, to secure the tax relief in case this is changed negatively.
The annual contribution allowance is £40,000 (providing your adjusted income is less than £150,000) which can be increased by any unused annual allowance of the previous three years. Contributions in excess of the allowance may be subject to a tax charge.
Capital Gains Tax
From 6 April 2020, there are some planned major changes to the Capital Gains Tax relief available when you sell a property that has at some point been your main home (i.e. has not been your main home throughout your period of ownership). In essence the availability of the relief is reduced where it has been let out and the potential period allowed prior to sale reduced, so if you have a property that would be subject to a capital gain if sold, it is worth considering what the implications of the changes are for you in case there is still time to act.
This will undoubtedly be an important area for any government, reducing CO2 emissions and working towards carbon neutrality will be an important factor in the decades, under current rules from 6 April 2020 we expect the a Zero P11d benefit on electric cars to be reintroduced. The article on the following page covers this in more detail.
Finally don’t forget the impending deadline for the submission of 2018/19 Self-Assessment Tax Returns which are due to be filed (and the tax paid) by 31 January 2020.