Spring 2021 UK Budget Summary

Listed Under: News

Spring 2021 UK Budget Summary

Chancellor Rishi Sunak has unveiled the details of his Budget in the House of Commons and here are some key points. 

What you need to know:  

  • The personal allowance (the amount you earn before you start paying income tax) will rise to £12,570 from April 2021, previously £12,500 and will remain at this level until April 2026. In addition, the higher rate threshold will also be increased to £50,270 and frozen until 2026.
  • The rate of corporation tax will increase from April 2023 to 25% on profits over £250,000. The rate for profits under £50,000 will remain at 19%. A tapered rate will be introduced for profits above £50,000. 
  • Mortgage guarantee scheme - will be introduced in April 2021. Lenders who provide mortgages to homebuyers who can only afford a 5% deposit on homes with a value up to £600,00 will benefit from a government guarantee on those mortgages.

What has remained unchanged:

  • The annual exempt amount of Capital Gains remains unchanged at £12,300 for individuals, personal representatives and some types of trusts and £6,150 for most trusts. This will remain unchanged until April 2026.
  • The ISA allowance will remain at £20,000 and £9,000 for the Junior ISA for 2021/2022 tax year.
  • The lifetime allowance will be maintained at the current level of £1,073,100 until April 2026.
  • The Inheritance tax bands will remain the same until April 2026. The nil-rate band will continue at £325,000; the residence nil-rate band will continue at £175,000 and the residence nil-rate band taper will continue to start at £2 million.