The chancellor, Rachel Reeves, delivered her first budget on Wednesday, and there were changes that could affect your financial plans. Here's our checklist of things you may want to do with your money as a result.
Use your Isa allowance
The chancellor confirmed that the limit on payments into these tax-efficient wrappers will remain at £20,000 a year until 2030. If you want to invest in stocks and shares, it makes good sense to use up that allowance first, as you can keep all of your capital gains. This was the case before the budget, but the increase in the rate of capital gains tax (CGT) on shares makes it all the more important.
On Wednesday, CGT on shares and other assets went up from 20% to 24% for higher-rate taxpayers, and from 10% to 18% for basic-rate taxpayers. If you are lucky enough to make a £15,000 profit on shares, and have no losses to offset, outside an Isa you would pay CGT on everything above your £3,000 annual allowance. For a higher-rate taxpayer, that means a CGT bill of £2,880, and £12,120 in your pocket. Make the same gain inside your Isa and you will keep the whole £15,000.
You can shield stocks and shares you already own from tax on future gains by moving them into the wrapper. However, you will pay stamp duty on shares you move, and might face CGT if you have already made a big gain, so get advice first.
Hurry if buying a home If you are planning to buy in England or Northern Ireland, act now to try to make sure the deal is complete before changes in stamp duty come in next year.
The chancellor opted not to extend temporary thresholds put in place by the previous government, so from next April, you will have to start paying stamp duty on any property priced over £125,000 - down from £250,000 now. First-time buyers will have to pay on homes worth more than £300,000. And they will only get first-time buyer relief on homes costing up to £500,000, compared with £625,000 now.
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