2021 Budget Announcements

The Inheritance Tax Nil-Rate Bands

They will remain at existing levels 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. Qualifying estates can continue to pass on up to £500,000 and the qualifying estate of a surviving spouse or civil partner can continue to pass on up to £1 million without an inheritance tax liability.

Personal Allowance

The income tax Personal Allowance will rise with CPI as planned to £12,570 from April 2021 and will remain at this level until April 2026.

Higher Rate Tax Band

The income tax HRT will rise as planned to £50,270 from April 2021 and will remain at this level until April 2026.

Capital Gains Tax Annual Exempt Amount (AEA)

The value of gains that a taxpayer can realise before paying Capital Gains Tax, the AEA, will be maintained at the present level until April 2026. It will remain at £12,300 for individuals, personal representatives and some types of trusts and £6,150 for most trusts.

Pensions Lifetime Allowance

The government will maintain the Lifetime Allowance at its current level of £1,073,100 until April 2026.

Starting Rate For Savings Tax Band

The band of savings income that is subject to the 0% starting tax rate will remain at its current level of £5,000 for 2021-22.

Individual Savings Account (ISA) Annual Subscription Limit

The adult ISA annual subscription limit for 2021-22 will remain unchanged at £20,000.

Junior ISA and Child Trust Fund Annual Subscription Limit

The annual subscription limit for Junior ISAs and Child Trust Funds for 2021-22 will remain unchanged at £9,000.