Budget 2018 - what it means for Financial Planning

The Chancellor Philip Hammond has delivered his budget today, with a focus on supporting Britain through investment in the NHS, Schools and offering support to small businesses on the high street. The much speculated changes to pensions limits and tax relief have failed to come through, and as a result its really business as usual from a financial planning point of view. We have summarised the key points below that could have an impact on you as our clients.

Alison & Adrian

With no significant tax or pension changes in today’s Budget, we can now plan for the tax year ahead with confidence. The key planning points for clients from today’s Budget, and from measures already announced unaffected by todays statement are:

Income tax

  • The personal allowance and higher rate threshold will increase earlier than expected to £12,500 and £50,000 respectively from April 2019. The income tax rates and bands for Scottish taxpayers will be announced in Scottish Budget on 12 December
  • There are no other changes to income tax bands or allowances.


  • The pension lifetime allowance will rise to £1,055,000 from April 2019.
  • Reassuringly, there are no changes to pension annual allowances .
  • The standard Annual Allowance remains at £40,000
  • The money purchase Annual Allowance stays at £4,000 (with no carry forward) this is applicable if you have accessed secured taxable income from a pension plan
  • There are no changes to the high income Annual Allowance taper rules for high earners who have salary packages above £150,000 per annum.

Capital gains tax

  • The capital gains tax allowance will increase by £300 to £12,000 from April 2019. Inheritance tax
  • As expected, the Inheritance tax nil rate band will remain frozen at £325,000 until April 2021.
  • The residence nil rate band will increase from £125,000 to £150,000 from April 2019, allowing some couples to leave up to £950,000 to future generations free of Inheritance tax.

Trust taxation

  • There will be a consultation to consider the simplification and fairness of trust taxation.
  • The existing Inheritance tax regime for trusts is notoriously complex and any attempt to simplify it is extremely welcome. ISAs
  • Annual ISA limits stay at £20,000 per person, with no reduction in the range of ISA options available to meet different needs.

Please email or call Alison (07496 689 309) or Adrian (07725 343 815) for a no obligation review of your circumstances.