Don’t be an April Fool this tax year

April, the favoured month of practical jokers. One thing that may not bring a smile to your face, however, is the beginning of a new tax year. Nevertheless, we wanted to update you on some of the developments you can expect in tax year 2019-20. 

Tax allowances 

In tax year 2019-20, the annual exempt amount – the amount of gains you can realise before being charged capital gains tax (“CGT”) – has increased to £12,000 for individuals. So, if you bought shares worth £100,000 in 2010 and sold these for £150,000 in 2019, you would only be charged CGT on £38,000 (£50,000 - £12,000). As for inheritance tax, the residence nil rate band – the additional nil rate band available where a deceased’s interest in residential property is inherited by their direct descendants – has increased to £150,000. A qualifying estate could therefore benefit from a total nil rate band of £475,000 (£950,000 for married couples). 

Probate fees 

The Government’s plan to replace the current fixed fee for obtaining a Grant of Representation (£215 for individuals, £155 for solicitors) with a scale system (under which estates valued in excess of £2,000,000 will have to pay £6,000) has been delayed. The plan will not be effected this month but is still expected in Spring 2019. 

Brexit 

Finally, this would not be a newsletter without a mention of Brexit; specifically, the effect it will have on assets you own in other EU member states. Nothing is certain with Brexit, but the general consensus is that it will not change the current position regarding assets in other EU member states. 

The EU Succession Regulation No. 650/2012 (commonly referred to as “Brussels IV”) governs the law applicable to estates with connections to more than one EU member state. The UK (Ireland and Denmark) opted out of Brussels IV, however, and is not bound by it. As such, the UK’s position is unlikely to change post-Brexit. 

If you would like further information about anything in this article, please contact your usual Wansbroughs’ contact on 01380 733300 or e-mail wealth@wansbroughs.com.

Last updated 24/04/2019