Paul Lewis: April money news
Winter fuel repayment, new inheritance tax rules, rises in state pension age and contactless card limit stalls.
Winter fuel repayment, new inheritance tax rules, rises in state pension age and contactless card limit stalls.
If you got the winter fuel payment this winter and your individual income in 2025/26 was more than £35,000, then HMRC will start taking the payment back this month.
Your tax code will have been reduced considerably so that one twelfth of the payment you received is taken every month from any other income taxed through PAYE, such as a pension or earnings.
If you received the £200 payment then the extra tax will be £16.67 a month, £8.33 if you got a £100 payment, and £25 if your payment was £300.
By the end of the tax year 2026/27 all the payment will have been taken back.
Self-employed people will pay the full amount on their 2025/26 tax return, which must be in by 31 January 2027. If you opted out of the payment, check you are not paying this extra tax!
Farms and family-owned businesses will now form part of the estate of people who die from 6 April this year and potentially be liable for inheritance tax. Before that they were free of the tax.
However, farmers and family-business owners will have three major advantages over everyone else.
First, on top of other allowances, they will get an extra allowance of £2.5 million. That is transferable to a surviving spouse if the first to die left everything to them.
Second, the rate of tax on the excess will be 20%, not 40%.
Third, any tax due can be paid over ten years – which applies to everyone – but in their case it will be interest-free.
If you reached state pension age at 66 or 65 or even 60, consider yourself lucky. Anyone born on 6 April 1960 or later will have to wait longer.
State pension age begins to rise this month in stages, starting at 66 and one month for people born 6 April 1960 to 5 May 1960 and then rising by one more month for each month until it reaches 67 for people born 6 March 1961 or later.
Age UK has more details on its website.
Banks are proving very reluctant to raise the contactless limit for credit and debit cards.
Since 19 March they have been free to scrap it altogether or raise it from the £100 limit that has applied since 2021.
But most are not doing this and unless you have been informed of a change by your bank then it has not adopted the new rule.
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