Post-Budget Opportunities

As usual, there were perhaps as many opportunities arising from what the Chancellor did not change in the Budget as there were from new legislation introduced.

Firstly, individuals still have the chance to make up for “missed” pension contributions from previous tax years so that a maximum contribution of up to £200,000 can be made (£250,000 in certain circumstances) where individuals have not had contributions made for their benefit in each of the last 3 tax years as well as in the current tax year.  This is based on a £50,000 annual allowance.  As the highest rate of tax remains at 50% in the current tax year, this could provide an added incentive to maximise pension contributions whilst this level of relief remains available, as it has been announced that this top rate will fall to 45% from next tax year.

Similarly, there was no change in terms of the tax relief available on Enterprise Investment Schemes (EISs) where individuals can obtain income tax relief of 30% on investments as well as the ability to defer capital gains tax.  Likewise, 30% income tax relief is still available on Venture Capital Trusts (VCTs) with dividends payable from such schemes also being exempt from tax.  In fact, the changes introduced to these schemes now enable them to invest in slightly larger companies. Please note however that these are higher risk vehicles and specific advice must be taken on the appropriateness of particular schemes as they apply to individual investors.

As we have entered a new tax year, individuals can use their ISA allowances which have increased to £11,280.  Therefore, a couple could invest £22,560 in this tax year and enjoy growth, largely free of income and capital gains tax.  The introduction of Junior ISAs also enables £3,600 to be allocated to similar vehicles for most children under the age of 18.

For further information, please contact your dedicated NLP FM consultant, or alternatively click here.


Please not that the value of investments can fall as well as rise and you may not get back the amount invested.