More tax on investments: This is the first full year of increased capital gains tax on stocks and shares

The increase in the capital gains tax rate for equity investors – from 10% to 18% for basic rate taxpayers and from 20% to 24% for higher and additional rate taxpayers – has come into effect into force the day after the budget, October 31. Ms Coles said this increase will be felt in 2025.

“For couples who manage their finances to ensure that lower earners pay capital gains tax, this is a particularly big blow, as the rate for these taxpayers has increased more than for higher earners .”

Buy a property

The rate at which you pay stamp duty has increased from £125,000 to £250,000 in 2022 and the threshold for first-time buyers has also been increased from £300,000 to £425,000.

Any increase in stamp duty also depends on the previous chancellor. Jeremy Hunt as when he took office at the Treasury, he announced that this tax relief would become a temporary stamp duty holiday, and would end at the end of March 2025.

Ms Coles warns: “The end of the tax break is likely to cause a rush in the first few months of the year as people try to sort their purchases ahead of the change. There is a risk that this will drive up prices in the short term. Eventually, so while you might pay taxes on less than the purchase price, you might end up paying more for the property in return. Once the holidays are over, that could mean a lull in the market, which could mean more buyers. lower their prices in order to move their property. Meanwhile, for buyers, it will mean an unwanted increase in their tax bill when they are already struggling with the never-ending costs of buying a home.

No more inheritance tax

The nil rate band for inheritance tax will remain at £325,000 and the nil rate band for residence at £175,000 in the next tax year. In fact, thanks to the Budget, it will stay at this level until 2030. Meanwhile, the annual IHT gift allowance passes its fourth decade at £3,000. This means more estates will have more inheritance tax (IHT) to pay.

Ms Coles said: “IHT was once seen as a tax on the rich, but a mix of booming house prices and threshold freezes means that may not be the case for much longer. this is likely to continue. »

No more housing tax: bills will increase up to 4.99%

Council tax will increase again in April. “Councils will have the right to increase bills by 4.99 per cent – ​​without holding a referendum,” Ms Coles explained.

“As many local authorities are struggling to make ends meet, it is likely that a very large number of them will opt for the largest possible increase.”

No More Sin Taxes: End of Alcohol Tax Freeze Coming – and Cigarette Taxes to Increase

Alcohol taxes will end in February and, although drinks on tap in pubs and bars have been protected, the price of other drinks will rise. Cigarette prices increased after the budget and are expected to rise further in fall 2025.

5 ways to reduce taxes in 2025

1. ISA

You can save up to £20,000 this tax year – completely tax free and a stocks and shares ISA will protect you from higher capital gains tax, while a in cash will protect you from income tax.

Ms Coles urges those looking to get on the property ladder to consider a Lifetime ISA. “If you are saving to buy a first property, are aged 18 to 39 and have at least a year left before considering buying, you should consider a LISA, as in addition to growth tax-free, you get a 25 percent interest rate bonus on contributions,” she said. “You can save or invest £4,000 this tax year.

“Don’t forget about Junior ISAs, because for the current tax year you can save or invest £9,000 in a JISA for any eligible child, and any interest, dividends or capital gains are exempt from tax.

Retirements

You can pay up to £60,000 in pension in the current tax year, provided your salary is £60,000 or more. Pension contributions are tax-relieved at your highest marginal rate, and the first 25% taken from the pension is generally tax-free. There is tax relief on pensions, including SIPPS, even for non-taxpayers – on the first £3,600 a year. This means you can make tax-efficient contributions to a pension on behalf of a child or non-working partner. If you can afford to save more money over the long term, it’s a great way to reduce your tax bill and ensure the income you need in retirement.

Salary sacrifice

In some cases the government will allow you to forgo part of your salary and spend it on certain things tax-free (and in some cases national insurance). This includes pensions, child care vouchers, bike to work programs and technology programs. Where employers offer to put their NI savings into the scheme, the increase in employer NI will make this option even more attractive. This won’t increase your take-home pay, but will reduce your tax bill and make your money work for you, so it’s worth checking with your employer if they offer this.

Spouse Exemptions

If you’ve already used up your ISA allowance and own assets that generate income – such as dividend-paying stocks or property – married people should consider how they hold them. They can be passed between spouses (or civil partners) without triggering a tax bill. They can therefore be shared between a couple, so that each benefits from their ISA allowances, and can both receive an income up to the threshold. The balance can be held by the spouse paying the lower tax rate, to reduce the tax payable.

Marriage allowance

“If one spouse is a non-taxpayer and the other is a basic rate taxpayer, the marriage allowance allows the non-taxpayer to give £1,260 of their personal allowance to their spouse over the course of the current fiscal year.”