Page 33 - Budget Newsletter - March 2023

Adjusted income limit £240,000 £260,000
Minimum annual allowance £4,000 £10,000
Money purchase annual allowance £4,000 £10,000
Annual allowance charge 20%-45% of excess 20%-45% of excess
Max. relievable personal contribution 100% relevant UK earnings or £3,600 gross if
greater

* May be increased under 2006, 2012, 2014 or 2016 transitional protection provisions.
However, from 6 April 2023, there will be no need for individuals to rely on these transitional
protection provisions.
¶ 50% taper down to the minimum allowance based on excess over adjusted income limit if
threshold income limit is also exceeded.

INHERITANCE TAX

Cumulative chargeable Tax Tax rate
transfers [gross] rate on in
2022/23 2023/24 death lifetime*
£ £ % %
Nil rate band + 325,000 325,000 0 0
Residence nil rate band ¶ 175,000 175,000 0 N/A
Residence nil rate band reduced if estate 2,000,000 2,000,000 N/A N/A
exceedsº
Excess above available nil rate band(s) No limit No limit 40 20
∞

* Chargeable lifetime transfers only.
+ On the death of a surviving spouse/civil partner on or after 9 October 2007, their personal
representatives may claim up to 100% of any unused proportion of the nil rate band of the
first spouse/civil partner to die (regardless of their date of death).
¶ On the death of a surviving spouse/civil partner on or after 6 April 2017, their personal
representatives may claim up to 100% of any residence nil rate band of the first spouse/civil
partner to die (regardless of their date of death, but subject to the tapered reduction).
º The reduction is £1 for every £2 of additional estate over £2,000,000. As a result, there is no
residence nil rate band available if the total estate exceeds £2,350,000 (£2,700,000 on second
death if 100% is transferable).
∞ 36% where at least 10% of the net chargeable estate, before deducting the charitable legacy,
is left to charity.

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