Autumn Budget 2021: How will it affect me as an individual?
The Chancellor Rishi Sunak has now given his second Budget. Whilst many of us had feared what the Chancellor may say given the pressure on the pubic purse following the Covid 19 Pandemic, the reality was that there was minimal change for the individual with the Budget really being focused on businesses and spending as opposed to major tax increases.
How will the budget affect me as an individual?
The deadline to report and pay Capital Gains Tax following the sale of UK property for UK residents has increased from 30 days to 60 days. This change takes effect immediately for completions that took place on or after 27 October 2021. Further, if a property is of mixed use when it is disposed of this extension will apply to the residential element of the gain. For non UK residents disposing of any type of UK property the deadline will also be 60 days.
We saw the introduction of the pre-announced Heath and Social Care Levy of 1.25% which will take effect from 6 April 2022. This will be achieved by an increase in National Insurance Contributions. From the 6 April 2023, this will become a freestanding levy.
We saw no changes to Income Tax or Savings Income Tax rates.
Personal Allowances for Income Tax remain unchanged and will remain at their current level of £12,570 until April 2026.
Despite further discussion and speculation about Capital Gains Tax changes we did not see any increase or changes to the how Capital Gains are taxed or reliefs applicable.
Inheritance Tax remains unchanged entirely.
We saw a change in basic rate Dividend tax which will rise to 8.75%. The higher rate Dividend tax will rise to 33.75% and the additional rate Dividend tax increases to 39.35%.
Whilst perhaps many of us may have been fearing significant changes to taxation to help increase much needed revenue for the Government, such changes were not forthcoming, at least not in this Budget. Instead we saw the Chancellor focus on spending with the aim of the Government being to reduce taxes by the end of this Parliament.
This reflects the law at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought as appropriate in relation to your own particular matter before action is taken.
Partner, Head of Private Wealth & Inheritance
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