The 2014 UK Budget
Two major implications relevant to British expats in Thailand
> Pension lifetime allowance (LTA). The LTA is drastically cut from £1.5m to £1.25m as of 6th April 2014. On 6th April 2012 the LTA was reduced from £1.8m to £1.5m. I guess it will not cause any uproar in the popular press when you grab another 40% of GBP550k of some people in only a couple of years’ time. (This could of course be completely avoided by moving the pension overseas, all HMRC approved. Get in touch and I will explain how.) Here is the text from the proposal:
“1.14 Pensions tax relief – As announced in the Autumn Statement, legislation will be introduced to reduce the standard lifetime allowance to £1.25 million for the 2014-15 tax year onwards. Transitional protection (fixed protection 2014) will be introduced to provide individuals with a lifetime allowance of £1.5 million subject to certain conditions. The Government will also consult on whether a personalised protection regime should supplement ‘fixed protection 2014’ in order to offer a more flexible protection regime. The Autumn Statement also announced that legislation will be introduced to reduce the annual allowance to £40,000 for the 2014-15 tax year onwards. As announced in Budget 2012, a power will be introduced in Finance Bill 2013 allowing regulations to be made to help ensure the rules on fixed protection introduced in Finance Act 2011 work as intended. A TIIN for this aspect was published on 3 March 2011.”
> Inheritance tax (IHT). Currently, a UK citizen spouse can only gift £55k to a foreign spouse free of IHT. This level is set to be raised to the normal levels of £325k after pressure from the EU. This has implications especially in for expat Brits living in Thailand, where so many have foreign spouses (Thai or other nationalities). Most might call it a good thing, I suppose, but at least you have to be aware of those things as well. Here is the text from the proposal:
“1.24 Inheritance tax (IHT): spouses and civil partners domiciled outside the UK – As announced in Budget 2012, legislation will be introduced to increase the IHT-exempt amount that a UK-domiciled individual can transfer to their non-UK domiciled spouse or civil partner to an amount defined by reference to the prevailing IHT nil-rate band at the time of the transfer. These provisions will also allow individuals who are domiciled outside the UK and who have a UK-domiciled spouse or civil partner to elect to be treated as domiciled in the UK for the purposes of IHT.“
Read more at the HMRC website.