Tax Allowances 2024-25

Category: Tax & Tax Year

The new tax year is here and along with it some changes to tax allowances and exemptions.

To help you make the most of your money this year, here’s a straightforward overview of tax allowances for 2024/25:

  • ISA Allowance: Remains at £20,000 across all ISAs, including a £4,000 allowance for Lifetime ISAs. You can now open more than one ISA of the same type in a tax year.
  • Pension Annual Allowance: Remains at £60,000 but can be as little as £10,000 for high earners or if you’ve accessed a pension.
  • Junior ISA Allowance: Invest up to £9,000 in a child’s future.
  • Personal Allowance: Earn up to £12,570 before paying tax.
  • Dividend Allowance: Reduced to £500 this tax year. Any income received from dividends above the allowance is subject to tax at your marginal rate.
  • Capital Gains Tax Allowance: Stands at £3,000. The profit or gain made when you sell or transfer an asset that’s increased in value since you acquired it, which is above this allowance is subject to tax.
  • Personal Savings Allowance: The amount of interest you can earn on your savings before you must pay tax on it is £1,000 for basic rate taxpayers, and £500 for higher rate taxpayers.
  • There were also a number of changes affecting businesses and business owners with a small increase to the VAT registration threshold (now £90,000) and a change to Class 2 National insurance contributions being the most notable.

Where profits exceed £6,725, Class 2 National insurance contributions will be treated as paid to protect your National Insurance record and you’ll still get access to contributory benefits like the State Pension.

If you’re unsure how these changes might affect you, just call us.

This is information only, and not advice. If you’re not sure what’s right for you, please seek advice. Tax rules can change, and benefits depend on personal circumstances.

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