Today (29th October) the Chancellor of the Exchequer, Philip Hammond, announced his second Autumn Budget. Traditionally the Budget is presented on a Wednesday, and Mr Hammond was keen to insist this change was not made to avoid his speech falling on Halloween.

As usual the Budget covered everything from changes in welfare to changes in personal finance (which I have focused on in this post).

If you have any questions about how these new measures could benefit you or your family please do not hesitate to Contact us.

An Overview and Analysis of the 2018 Budget

Capital Gains Tax

The Capital Gains Tax allowance will rise by £300, to £12,000 per year, from April 2020.


In last year’s Budget, Hammond introduced new rules targeted at people who effectively worked as an employee but legally worked on a quasi-self-employed basis through a private limited company (referred to as the “IR35 rules“). Previously these changes were only aimed at those working for the public sector (such as the NHS) on this basis but, from April 2020, these rules will be extended to cover those working for medium and large companies (such as banks).

Those who can demonstrate that they genuinely work on a self-employed basis through a limited company (or a similar arrangement) will not be affected by these changes, although critics argue this test is never clear cut.

Lifetime ISA

No changes were announced to the LISA. The LISA gives savers aged between 18 and 40 a generous government bonus as long as the LISA savings are eventually used for retirement or for a first house purchase.


To great surprise from our industry, no new pension rules were revealed.

The Lifetime Allowance will increase in line with inflation (as planned) from £1,030,000 to £1,055,000 from April 2019.

Savings and Investments

The ISA limit for the 2019/20 tax year will remain at its current level of from £20,000.

The Junior ISA limit will rise in line with inflation to £4,368 per year.

Inheritance Tax

No changes were announced in relation to Inheritance Tax in today’s Budget. This means the Residence Nil Rate Band should increase by £25,000 to £150,000 per person from April 2019.

The Residence Nil Rate Band allows you to leave up to £125,000 (in this tax year) of your home to your children (or grandchildren) tax free when you pass away. From April 2019 this will be £150,000 (or £300,000 for a married couple or civil partners).

Personal Taxation

The Personal Allowance (the amount you can earn tax-free each year) will rise to £12,500 (from £11,850 currently) on 6th April 2019.

The higher rate band will rise to £37,500 (from £34,500 currently) as planned. This means anyone with total income under £50,000 (the £37,500 higher rate band plus £12,500 personal allowance) should not pay higher rate tax from April 2019.

These two changes were arguably the biggest surprises in the Budget – while they were always promised by the Tories, they were not due until April 2020.

There is a small sting in the tail: in April 2020 no increases are planned to either of these allowances. From April 2021 onwards these allowances will rise in line with inflation, which is another positive change.