Lowes Magazine Issue 125

INSIDE TRACK

Capital gains tax exemption changes

Consolidating pension pots

THERE ARE SOME IMPORTANT CHANGES TO CAPITAL gains tax (CGT) exemption rates being introduced over the next two years which may affect your financial planning. In his Autumn Statement, Chancellor Jeremy Hunt announced that the annual exempt amount for CGT is reducing from £12,300 for individuals to £6,000 from April 2023. And there will be a further reduction from £6,000 to £3,000 from April 2024. This significant 50%+ drop in the amount that can be earned free of CGT will affect gains from investments held outside an ISA or pension, as well as when you sell or gift items, such as antiques and art, over the value of £6,000. It also affects owners of second homes and landlords of residential properties. Individuals in the basic rate income tax band pay 10% on their gains and 18% on gains from a residential property. Higher and additional rate taxpayers pay 20% on gains and 28% on residential property. If you intend to dispose of assets subject to CGT after 5 April of this year, you should consider whether to sell earlier to take advantage of the current exemption rates. If you need help or have any concerns, your Lowes Adviser can assist you.

IF YOU HAVE BUILT UP A NUMBER OF pensions over the years and want to simplify managing them, it is possible to consolidate all your pension pots under one plan. As well as making things simpler, this also can reduce the charges you pay. However, as some pensions have guarantees or other benefits included, which may be lost if the pension is moved, it will pay to seek professional advice to ensure the best result is achieved. For a pensions health check, please speak to your Lowes Adviser, or call 0191 281 8811.

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www.smartsavebank.co.uk Notes: 1 Tiered rates: 2.75% £1 - £9,999, 2.85% £10,000 - £49,999, 2.90% £50,000+. 2 Limited to 6 free withdrawals per annum. You may also wish to consider Premium bonds offered by National Savings and Investments (NS&I), maximum £50,000. Whilst interest not guaranteed, they do offer the opportunity for tax free winnings which, with ‘average luck’ should generate at least 2.4% pa. Measures of inflation - The average change in prices of goods and services over a 12 month period to December 2022 Retail Prices Index (RPI) 13.4% Consumer Prices Index (CPI) 10.5% Sources: Providers’ websites, Office for National Statistics, www.thisismoney.co.uk, www.moneysupermarket.com, www.moneyfacts.co.uk 17/01/2023. All accounts subject to terms and conditions.

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If you would like to receive further information on any of the subjects featured in this issue please call: 0191 281 8811 , fax: 0191 281 8365 , e-mail: client@Lowes.co.uk , or write to us at: Freepost LOWES FINANCIAL MANAGEMENT . Lowes ® Financial Management Limited. Registered in England No: 1115681. Authorised and Regulated by the Financial Conduct Authority.

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