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There were some interesting twists to Philip Hammond’s third Budget presented amid traditional uproar to the House of Commons earlier this week. The introduction of a digital services tax aimed at the likes of Amazon, Facebook & Google, a plastics tax to encourage greater use of recyled material and the end (or at least the beginning of the end) of PFI contracts.

For savers and investors it was, with a few exceptions, ‘business as usual’ and many of the chancellor’s announcements merely confirmed that there was to be no change.

Personal Allowance

This is the amount you can earn before you start to pay Income Tax and is increasing from £11,850 to £12,500 for tax year 2019-20.

Income Tax Bands and Rates

The basic rate of Income Tax remains unchanged at 20% and in 2018-19 the first £37,500 of income is charged at this rate. Combined with the increase in the personal allowance this means that you need to have income of £50,000 before you start paying tax at the higher rate of 40%. Income Tax allowances in Scotland will be confirmed later in the year.

Capital Gains Tax (CGT)

CGT is the tax that you pay on any gains on the sale of shares or bonds. The annual CGT exemption (on which you pay no tax) increases to £12,000 for 2018-19. The rates that you pay CGT depend on whether you are a basic or higher rate taxpayer and remain unchanged at 10% & 20%.

Individual Savings Accounts (ISAs)

ISAs enable you to invest without paying Income Tax or CGT and include Innovative Finance ISAs (IFISAs) which let you put money into Peer to Peer (P2P) Loans, Debt Securities and Crowdfund Bonds. There were no changes announced to the IFISA rules yesterday and it was confirmed that the annual allowance – the amount you can invest in an IFISA – will be £20,000 for 2019-20.

Innovative finance ISAs have been popular with crowdfunding investment platforms in the UK. ShareIn offers products to “ISA enable” your existing site. If you are thinking of starting a crowdfunding platform we provide technology and compliance to get you up and running quickly. 

Pensions Relief

Possibly the biggest surprise of the Budget was that there were no changes to pensions relief. It had been suggested that higher rate tax relief or the amount that you can pay in to a pension would be scaled back. You may be able to include Crowdfunded Shares or Bonds in your Self Invested Pension Plan (SIPP); contact your pension provider for details.

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