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The Budget

including Budgets
Charlottesquare
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Re: The Budget

#98595

Postby Charlottesquare » November 24th, 2017, 5:37 pm

Bouleversee wrote:Thanks, PD. So at present it's still £500 savings interest allowance and £5000 dividend allowance but no personal allowance if total income is over £123,000; not that mine will be but one family member is over that limit, I believe.

I have yet to work out whether I will be paying higher rate tax in the current year or next, as a result of having inherited my husband's state pension. I'm sure I should be getting rid of my non-ISA shares before next year. In what order do they apply the allowances to your total income? Presumably it would have to be personal allowance against your total income and then the appropriate level of interest allowance and the dividend allowance.


I believe you can choose what income the PA applies against, though to date have not had to do this re any clients.

I think the dividend allowance drops to £2,000 re 2018/2019 per Finance Act (2) 2017, assent on 16/11/17, all the stuff that got lost in wash up when they stupidly called an election, see clause 8 re dividend allowance.

http://www.legislation.gov.uk/ukpga/201 ... d/data.htm

torata
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Re: The Budget

#98883

Postby torata » November 26th, 2017, 4:50 am

Charlottesquare wrote:I think the dividend allowance drops to £2,000 re 2018/2019 per Finance Act (2) 2017, assent on 16/11/17, all the stuff that got lost in wash up when they stupidly called an election, see clause 8 re dividend allowance.

http://www.legislation.gov.uk/ukpga/201 ... d/data.htm


There still seems to be a lot of confusion over this.
I just listend to the Investors Chronicle personal finance podcast and they said it remains at £5,000.
How and where will clarity come?

torata

PinkDalek
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Re: The Budget

#98924

Postby PinkDalek » November 26th, 2017, 11:43 am

torata wrote:
Charlottesquare wrote:I think the dividend allowance drops to £2,000 re 2018/2019 per Finance Act (2) 2017, assent on 16/11/17, all the stuff that got lost in wash up when they stupidly called an election, see clause 8 re dividend allowance.

http://www.legislation.gov.uk/ukpga/201 ... d/data.htm


There still seems to be a lot of confusion over this.
I just listend to the Investors Chronicle personal finance podcast and they said it remains at £5,000.
How and where will clarity come?

torata


I haven't heard the podcast but the dividend allowance remains at £5,000 for 2017/18.

However, using Charlottesquare's useful confirmatory link, you should get to section 8 of the Finance (No. 2) Act 2017 here http://www.legislation.gov.uk/ukpga/201 ... /8/enacted. This shows:

8 Dividend nil rate for tax year 2018-19 etc

(1) In section 13A of ITA 2007 (income charged at the dividend nil rate), for “£5000”, in each place, substitute “£2000”.
(2) The amendments made by this section have effect for the tax year 2018-19 and subsequent tax years.


In other words, currently £5,000 but reducing to £2,000 wef 6 April 2018.

Bouleversee
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Re: The Budget

#98934

Postby Bouleversee » November 26th, 2017, 12:06 pm

Yes, I was only talking about the current year. I realise the div. allowance is only £2000 next year. I have often noticed errprs or omissions in publications, e.g. they talk about the £1m allowance for one's home (RNRB) without going into the phasing in, limitations as to who can benefit, or the tapering away on estates of over £2m. The devil is always in the detail but not everyone (me included) has time to plod through the entire finance bill, though I should try to find it. How long does it take, PD?

Bouleversee
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Re: The Budget

#98946

Postby Bouleversee » November 26th, 2017, 12:39 pm

PinkDalek wrote:
Bouleversee wrote:
PinkDalek wrote:35

Reconfirm but I think it was included in the second, post election, Finance Act this year (assuming the Finance Bill has been enacted).

This page https://www.gov.uk/government/publicati ... nces#fn:11 includes:

11. From April 2016, the Dividend Allowance means that individuals will not have to pay tax on the first £5,000 of dividend income they receive. From April 2018, the dividend allowance will be reduced to £2,000.


Don't you lose these allowances anyway if your income is over a certain amount? I forget what that is.


No, not that one Boulee.

Also from the same page:

12. From April 2016, the new Personal Savings Allowance means that basic rate taxpayers will not have to pay tax on the first £1,000 of savings income they receive and higher rate taxpayers will not have tax to pay on their first £500 of savings income.

The lost allowance that I can immediately think of relates to the Income limit for personal allowance £100,000 whereby:

7. The Personal Allowance reduces where the income is above £100,000 – by £1 for every £2 of income above the £100,000 limit. This reduction applies irrespective of date of birth.

Others are listed.


Actually, PD, the link you gave only refers to higher rate taxpayers but having just unearthed some pages I printed quite recently from the Gov. UK website relating to the current year, it would seem that if you are an additional rate taxpayer (as opposed to higher rate) you lose the savings allowance completely as well as the personal allowance, so will be paying 45% on all interest, but you are right that you will still get £5000 div. allowance this this year, reducing to £2000 next year. Please correct me if I am wrong, though that would mean the website is wrong; I do find it horribly complicated and wonder why interest (especially since rates have fallen so drastically) is treated so harshly compared with dividends. It would be interesting to know what tax is payable on income from property.

JohnB
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Re: The Budget

#98950

Postby JohnB » November 26th, 2017, 12:59 pm

The classic answer with interest/dividend taxation is the former has only one tax applied, the latter comes from company profits which already have corporation tax applied, so is actually taxed more.

The political answer is that the government want to tax dividends at income tax rates with no allowance, but need to introduce it gradually to reduce the wailing, as with insurance premium tax.

PinkDalek
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Re: The Budget

#98964

Postby PinkDalek » November 26th, 2017, 2:19 pm

Bouleversee wrote: Actually, PD, the link you gave only refers to higher rate taxpayers but having just unearthed some pages I printed quite recently from the Gov. UK website relating to the current year, it would seem that if you are an additional rate taxpayer (as opposed to higher rate) you lose the savings allowance completely as well as the personal allowance, so will be paying 45% on all interest, but you are right that you will still get £5000 div. allowance this this year, reducing to £2000 next year. Please correct me if I am wrong, ...


Yes Boulee you are correct but I was primarily talking about the Dividend allowance. The extract I provided on the Savings allowance does indeed only go up to higher rate taxpayers. I should have delved deeper and read what I'd actually extracted!

It would be interesting to know what tax is payable on income from property


Broadly 20%/40%/45% on the taxable amount (different rates apply in Scotland and ignoring the relatively new £1,000 Property and Trading Allowance [from 6 April 2017] which would only be of benefit to small landlords/lessors etc and is not available to those who already benefit from Rent a Room Relief).

Bouleversee
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Re: The Budget

#98975

Postby Bouleversee » November 26th, 2017, 2:58 pm

Thanks, PD. I wasn't aware of that allowance. Do you know whether or not that also gets reduced/axed for higher/additional rate taxpayers? Dashing out now but may have time to check on Gov.UK when I get back. John B's rationale would suggest that it would be.

Maroochydore
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Re: The Budget

#99026

Postby Maroochydore » November 26th, 2017, 6:38 pm

Bouleversee wrote:Is the additional state pension (SERPS) going up as well as the basic pension? If so, by how much? I don't recall it being mentioned.


Yes. SERPS is outside of the 'triple lock' and increases are linked to CPI. Therefore, luckily for us recipients this year, SERPS should go up by 3% as well as 3% for the basic state pension.

PinkDalek
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Re: The Budget

#99031

Postby PinkDalek » November 26th, 2017, 7:14 pm

Bouleversee wrote:Thanks, PD. I wasn't aware of that allowance. Do you know whether or not that also gets reduced/axed for higher/additional rate taxpayers? Dashing out now but may have time to check on Gov.UK when I get back. ...


You are asking about the "two new annual tax allowances for individuals" being a property and a trading income allowance wef 6 April 2017, which I mentioned in passing.

Below is the original Policy paper (Published 5 December 2016), which I believe has now been enacted (after being temporarily put on hold due to the snap election):

https://www.gov.uk/government/publicati ... ing-income

It includes (my bold):

Who is likely to be affected

Individuals with small amounts of income from providing goods, services, property or other assets. ...

Where the allowances cover all of an individual’s relevant income (before expenses) then they will no longer have to declare or pay tax on this income. ...

Those with higher amounts of income will have the choice, when calculating their taxable profits, of deducting the allowance from their receipts, instead of deducting the actual allowable expenses. The trading allowance will also apply for Class 4 National Insurance contribution purposes. ... The allowances will not apply in addition to relief given under the Rent-a-Room Relief legislation.


I'm guessing it applies to all taxpayers but I doubt it would benefit many higher rate/additional rate taxpayers in any event, as they'd probably prefer to deduct "the actual allowable expenses", obviously depending on their circumstances.

It looks like I might no longer be taxed on my ground rent of £7.50 (rounded down to £7) but I've yet to see that those who have to fill in a Tax Return still need to declare the income or not! ;)

Others who might benefit include occasional eBayers, front drivers/JustParkers, some rabbit hutch Airbnbers (possibly) and micro traders.

PS This article may be worth a read (I think it answers my ground rent question) https://tinyurl.com/y8od4cwa from http://www.taxadvisermagazine.com

Bouleversee
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Re: The Budget

#99069

Postby Bouleversee » November 26th, 2017, 9:45 pm

Maroochydore wrote:
Bouleversee wrote:Is the additional state pension (SERPS) going up as well as the basic pension? If so, by how much? I don't recall it being mentioned.


Yes. SERPS is outside of the 'triple lock' and increases are linked to CPI. Therefore, luckily for us recipients this year, SERPS should go up by 3% as well as 3% for the basic state pension.


Where does it say that? I don't think it increased by as high a percentage as the basic pension last year.

Maroochydore
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Re: The Budget

#99381

Postby Maroochydore » November 27th, 2017, 9:59 pm

Bouleversee wrote:
Maroochydore wrote:
Bouleversee wrote:Is the additional state pension (SERPS) going up as well as the basic pension? If so, by how much? I don't recall it being mentioned.


Yes. SERPS is outside of the 'triple lock' and increases are linked to CPI. Therefore, luckily for us recipients this year, SERPS should go up by 3% as well as 3% for the basic state pension.


Where does it say that? I don't think it increased by as high a percentage as the basic pension last year.


In this article http://www.dailymail.co.uk/money/pensio ... rates.html about halfway down under "Serps, S2P and graduated retirement benefit".
Quote :Regarding these elements of your state pension, the law and the policy are different to the rules around the basic pension.
The law only requires these parts of your pension to go up in line with prices or CPI, and there is no ‘triple lock’ policy. This year, of course, this implies a 3 per cent increase on this part of your pension as well.
But in previous years, when inflation was much lower, you would have got a smaller increase on this part of your pension than on the basic pension which was covered by the ‘triple lock’ policy.


Not the official announcement but no reason to suspect the info isn't correct.


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