17 Tax Changes To Watch Tax Year 2017

Published / Last Updated on 09/04/2017

List 17 Tax Changes To Watch Tax Year 2017/18.

It’s a new tax year tomorrow, so we thought we would give you a list of things that may affect you immediately:

Personal Allowance increases to £11,500 from £11,000.

Threshold Earnings for 40% income tax rises to £45,000 from £43,000 (England, Northern Ireland, Wales).  In Scotland it will remain at £43,000 as Scotland takes control via Scottish Income Tax Laws.

Marriage Allowance increases to £1,150 from £1,000 (this is when your partner can transfer unused personal allowance)

ISA Allowance £20,000 (from £15,240)

New Lifetime ISA for 18-40 year olds with 25% bonus, for house deposit or longer term tax free pension fund. £4,000 Allowance (meaning £1000 bonus).

Junior ISA Allowance £4128 (from £4080)

Buy to Let “financing expenses” start to be restricted with how much you can claim and will gradually be phased to nil.  IN addition, the amount of income tax expense to 20% basic rate expense relief rather than your full rate of income tax if you are a 40%/45% tax payer.  This is phased in from tomorrow as follows:

Tax year

Percentage of finance costs deductible from rental income

Percentage of basic rate tax reduction

2017 to 2018

75%

25%

2018 to 2019

50%

50%

2019 to 2020

25%

75%

2020 to 2021

0%

100%

Air Passenger Duty Doubles:  This will add another £13 to a short haul flight and up to £75 to a long haul flight.

Inheritance Tax ‘Residence Nil Rate Band’ (RNRB) starts at £100,000  (added to your main inheritance tax allowance of £325,000).  Total £425,000.  £850,000 for couples from tomorrow.  The £100,000 RNRB increases over 3 years to £175,000.  Meaning £325,000 + £175,000 = £500,000 allowance each.  £1m allowance for couples.

Capital Gains Tax Allowance £11,300 (from £11,100)

New Sharing Goods/Services Allowance:  £1,000 for selling things that you make e.g. crafts/jewellery/birdhouses etc. or even car ‘lift’ sharing e.g. to work.

New Sharing Property Allowance:  £1,000 tax free allowance for renting your drive, loft space or even your whole home e.g. on Airbnb

Money Purchase Pension Annual Allowance:  £4,000 down from £10,000.  This is the maximum you pay into pension schemes after you have triggered full, flexible drawdown from any pension.

Bereavement Lump Sum: increased from £2000 to £2500 (if no minor children) and £3,500 if minor children

Bereavement Regular Payment:  £100 pm (no children) £350 pm if children.  These payments stop after 118 months, when the old Widowed Parents Allowance used to continue until youngest child leaves school.

Road Tax:  New cars now subject to 1st road tax band based upon CO2 emissions, all CO2 emissions standard road tax rates increase.  

Basic State Pension £122,30 per week + pension credit increases. For those on NEW State Pension £159.55 per week.

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