Key Takeaways for Private Clients in 2021 Budget

With ongoing discussions in the Private Client industry of a potential overhaul of the Inheritance Tax (“IHT”) and/or Capital Gains Tax (“CGT”) regime, Private Client practitioners may well have drawn a sigh of relief to see that the IHT and CGT regime was untouched in this year’s Budget.  

This article briefly summarises the Government’s pledges in the 2021 Budget that are most relevant to private clients:

• All IHT rates and allowances are untouched and the Government pledged that the current rates and allowances will be frozen until the tax year end 5 April 2026.
• Similarly, the Government has confirmed that the CGT personal allowances and rates will remain the same and that these rates will be frozen until the tax year end 5 April 2026.
• The Government declared that Income Tax rates and personal tax thresholds will be frozen until 5 April 2022 and pledged to increase the personal tax allowance to £12,570 and the higher rate threshold to £50,270 from 6 April 2022. The Government made a further pledge to freeze these increased rates until 5 April 2026. 
• The Pension lifetime allowance is being maintained at £1,073,000 and the Government have pledged to freeze this rate of allowance to the tax year end 5 April 2026.
• The Stamp Duty holiday has been extended to 30 June 2021 to allow more property transactions to benefit from the relief. Read more about the SDLT holiday extension here.

If you have any queries in relation to the above taxes, or require wills or tax and estate planning advice, then please contact the Head of Private Client team, Stuart Crippin, stuart.crippin@seddons.co.uk or 020 7725 8056.