It all sounds like Tax magic
When I make a promise to myself, I like to keep it, and the promise I made earlier in the year was to produce a “Tax Matters To You” newsletter every week, unfortunately, events overtook me last week, and well it was a bank holiday weekend. I promise to try harder.
In part, the week was extra busy, as I was getting ready for our new tax team member to join next week. There are email addresses, phone number, software licences and most importantly portfolio selection to arrange all of which take extra time out of the week. I look forward to introducing you to them shortly.
Did you hear about the election on 4th July, this certainly means the newsletter is going to have a lot to say over the coming weeks as the parties discuss their tax manifesto pledges, don’t worry I will not be writing a daily newsletter, just selecting the interesting ones.
Grab your coffee and biscuit and let’s get started
Tax Cuts - not for everyone
If the Conservatives win the election, Prime Minister Rishi Sunak has promised to increase the tax-free allowance for pensioners, resulting in tax cuts for thousands of them.
As pensions rise due to the triple lock, they are nearing the £12,570 threshold. To counteract the impact of frozen tax-free allowances, Sunak has pledged to unfreeze the personal allowance for pensioners starting in April 2025.
The higher tax-free allowance for pensioners was abolished by former Chancellor George Osborne in 2012 during the coalition government.
Currently, the state pension is £11,542 a year, so pensioners with just £1,000 more in private pension income must pay basic rate tax. The triple lock is expected to raise the state pension to £12,893 by 2028, with thresholds remaining frozen until then.
Sunak's proposal would provide an additional £100 to eight million pensioners next year and £300 annually by the end of the next parliament, costing £2.4 billion a year.
The Institute for Fiscal Studies (IFS) estimates that this plan could exempt up to 750,000 (6%) pensioners from paying income tax and potentially increase the incomes of 7.5 million people.
Under this plan, the pensioner’s tax-free threshold would rise in line with the triple lock, which increases based on the highest inflation rate, average earnings, or a minimum of 2.5%.
Although, this is great news for all those who will be affected, what do the Labour Party and Racheal Reeves propose?
A Sprinkle of Tax Magic
The continuing saga of Angela Rayner and her Capital Gains Tax issues came to an end this week following a statement from the Greater Manchester Police
“Following allegations about Angela Rayner MP, Greater Manchester Police has completed a thorough, carefully considered and proportionate investigation. We have concluded that no further police action will be taken.
“The investigation originated from complaints made by Mr James Daly MP directly to GMP. Subsequent further contact with GMP by members of the public, and claims made by individuals featured in media reporting, indicated a strong public interest in the need for allegations to be investigated.
“Matters involving council tax and personal tax do not fall into the jurisdiction of policing. GMP has liaised with Stockport Council and information about our investigation has been shared with them. Details of our investigation have also been shared with His Majesty’s Revenue and Customs (HMRC).”
After speaking with Jon Golding in the tax team he believes that she has made use of Extra-Statutory Concession (ESC) D21 which is deeply hidden away, and therefore is not often used.
This ESC allows an individual who: lives in a property in which they have no significant economic interest, owns another property, and is unaware of the need to nominate which will be treated as their private residence to make the nomination outside the two-year window.
A great piece of detective work from Jon, he certainly enjoys finding a solution to everyone's tax issue.
I hope you have enjoyed this edition of my newsletter, and found it both enjoyable and informative, if you have any suggestions or comments then please let me know it is always good to hear from you. In addition to the newsletter, I am also updating the website, so please take a look from time to time to see what is happening.
If I or the Tax Matters team can be of any assistance to you, your family or your friends then please do not hesitate to contact me at 01442 828006 or jreeves@taxmatters.tax
