How Will UK Taxes Change In 2021

How Will UK Taxes Change In 2021 - Northwood Accountancy

How Will UK Taxes Change In 2021

There are a series of tax changes that are scheduled to take place in 2021 that can affect businesses and/or individuals. It is essential that you know what these amendments are to avoid getting penalized. If you are wondering how will UK taxes change in 2021, read on to find out more.

The capital gains levy allowance is set to go up to 12,300 pounds, up from 12,000 pounds. This means that when you sell an asset, which is not your house, and you make a profit out of it, you can keep anything that falls in that bracket.

Therefore, the capital gains levy is going to go down. You are expected to pay this levy within 30 days after disposing of your assets. Any profit exceeding the 12,300 allowance is taxed at the rate of 10% (18% for property) in the case of basic rate taxpayers and 20% (28% for property) for higher rate tax payers.

The construction industry is also affected. There will be a VAT reverse charge in relation to construction services. There is also to be the introduction of a 2% rate increase of SDLT affecting non-residents, who want to purchase residential property in Northern Ireland and England.

Concerning inheritance levy, you didn’t have to pay a levy for an estate worth 325,000 pounds or less than that was left to be inherited by descendants. In 2021, this threshold was increased from an additional 125,000 pounds to 175,000 pounds when a main house is inherited by either a child or grandchild. The goal of this is so that family homes can be passed through the generations at a reduced cost.

The lifetime allowance was raised to 1.075 million pounds and it won’t be taxed. This applies to all kinds of pensions, excluding overseas and state pensions. No levy will be paid unless are above 75 years, which is the state pension age, or you exceed the allowance.