Goodman Jones Spring Budget 2024

15 March 2023 l BUDGET 7 6 4 Transfer of assets abroad Legislation in the Finance Bill 2024 will ensure that individuals cannot use a company to bypass anti-avoidance legislation, known as the ‘transfer of assets abroad’ provisions, to avoid UK income tax. The changes will take effect for income arising to a person abroad from 6 April 2024. PENSIONS, SAVINGS AND INVESTMENTS Lifetime allowance (LTA) The LTA will no longer form part of the pensions tax regime from 6 April 2024, as recently legislated for in the Finance Act 2024. However, two new allowances, the lump sum allowance (£268,275, subject to any transitional protection) and the lump sum and death benefit allowance (£1,073,100, subject to any transitional protection) will place new constraints on the lump sum benefits that can be drawn with no tax charge. Annual allowance (AA) The AA for pension contributions will remain at £60,000 for 2024/25. The AA is subject to tapering when an individual’s threshold income exceeds £200,000 and their adjusted income exceeds £260,000. The minimum AA resulting from the application of the taper rules will stay at £10,000 (applying when adjusted income is £360,000 or more). The money purchase annual allowance (MPAA), which applies to those who have drawn pension benefits flexibly, will also remain at £10,000. Pensions relief relating to net pay arrangements The Finance (No 2) Act 2023 provides for HMRC to make top-up payments from 2024/25 to individuals who have a total income below the personal allowance and who save into a pension scheme using a net pay arrangement. Topup payments should be made as soon as possible after the tax year in which the contribution is paid. > SAVER Investing in pensions. You may be able to make much larger pension contributions because the annual allowance has gone up to a maximum of £60,000 and the lifetime allowance will have been abolished.