Autumn Budget 2021 – Private Client focus
The UK’s Chancellor of the Exchequer delivered his Autumn Budget on 27 October 2021. There was the usual political fanfare but what does this actually mean for people’s assets?
There was lots of talk on spending by the Government to build an “economy of higher wages, higher skills, and rising productivity”. This could have translated into lots of tax rate increases as the Chancellor also said “everyday spending must be paid for through taxation”. However, the Autumn Budget did not introduce any immediate tax rate rises.
Despite no immediate increases, most tax thresholds and exemptions have been frozen which means that the tax intake will increase. There was no mention of changing taxation of pensions or non-doms, so for now they are safe.
Key points at a glance
Capital gains tax (CGT)
No increase in CGT rates. There was much speculation (as there has been for a number of years) but nothing has come of it. The annual exempt allowance will be frozen at its current level of £12,300 for individuals and £6,150 for trusts until 2026.
CGT: residential property payment window
From 27 October 2021, the deadline to report and pay CGT on the disposal of UK residential property increased from 30 days to 60 days. This is welcomed as the 30 day deadline following completion did pose a cashflow and logistical problems for many. The extension is not as long as some would like and is certainly not as long as it was before 6 April 2020.
Inheritance tax (IHT)
No change here. The status quo continues with the nil rate band will remaining at £325,000 and the residence nil-rate band will continue to be £175,000.
There was no mention of the rumoured ‘simplification’ or changes to reliefs such as Business Property Relief.
The Personal Allowance and high-rate tax threshold remain the same at £12,750 and £50,270.
If you would like more information, get in touch with Hilesh Chavda.