The beginning of April 2024 has not only brought chocolate eggs, sunshine and spring flowers but also a flurry of tax changes. The tax changes 2024 / 2025 will create winners and losers, depending on how much you earn. However, with frozen allowances and thresholds until April 2028 – the overarching message is ‘fiscal drag’.
With dividend allowances reducing to £500 and the CGT annual exemption halving to £3,000 – should you be transferring assets between you (as spouses/civil partners) tax-free to ensure these ‘tax-free allowances’ are being utilized? If your total taxable income is less than £18,750, you should not pay tax on your savings income.
And, did you know that you are able to pay more into your pension than before, if you are still earning – and bank tax relief of up to 60%? Are there any gaps in your National Insurance Contribution record which could be filled before 5 April 2025?
Other changes to highlight include:
- If you enjoyed the 2p cut in National Insurance in January, there is more to come this month – especially if you are self-employed with Class 2 National Insurance being abolished and a 3p reduction.
- The Child Benefit threshold rises to £60,000 to ensure that no basic rate taxpayers will lose out. You’ll need to earn over £80,000 before your receipts are fully clawed back.
- The CGT rate has reduced to 24% if you are a higher/additional rate taxpayer selling residential property.
- Making Tax Digital (MTD) for individuals does not come into effect until April 2026!
The new tax year will impact us all in different ways. Find out more about our Tax Advisory services at CKLG on our website here.
To help you keep on top of what is going on in the tax world, call 01223 810100 for friendly help and advice.
