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Individuals

Personal allowances 
Immediate changes 

 

2014/15

2015/16

Born after 5 April 1948

£10,000

£10,600

Born after 5 April 1938 before 4 April 1948

£10,500

£10,600

Marriage allowance ( also for civil partners) born after 5 April 1935

£1,060

Savings rate: 0%

0 - £5,000

TBA

Basic rate: 20%

0 - £31,900

0 - £32,300

Higher rate: 40%

£31,901- £150,000

£32,301- £150,000

Additional rate: 45%

Over £150,000

Over £150,000


ISA Savings
Immediate changes

 

2014/15
(limits from 1 July 2014)

2015/16

Shares and cash ISA

£15,000

£15,240

Junior ISA and Child Trust Fund

£4,000

£4,080


Future promises

With effect from 1 July 2015 the types of investments that can be included with an ISA or child trust fund account will be expanded to include; bonds issued by co-operative societies and community benefit societies and possibly investments made under peer to peer lending arrangements.

The Government will consult on changes that will allow investors to withdraw money from their ISA and replace it within a tax year, without that replacement money counting towards their annual ISA investment limit. 

Another idea is to help first time buyers save for a deposit to buy their first home. From late 2015 savers who do not own their own home will be able to open special "help to buy ISA". For each £200 they save the Government will contribute into the ISA a further £50, up to a maximum of £3000. The help to buy ISA can be kept open for up to four years and can be used to buy a home for the saver to live in (not let out) that costs up to £450,000 in London or up to £250,000 outside London.

A third change to the tax on savings will be to exempt from tax the first £1,000 of bank and building society interest for basic rate taxpayers each year. Higher rate taxpayers will be eligible to receive £500 of tax free bank interest per year. Additional rate taxpayers will not benefit from this savings allowance. This allowance will apply in addition to tax free savings in ISAs from 6 April 2016.

Pensions
Immediate changes 

There are no immediate changes to tax relief for pension contributions. The annual allowance remains at £40,000 for 2014/15 and 2015/16. Although where the taxpayer has started to draw their pension benefits from a defined contribution (money purchase) scheme in excess of the tax-free amount, their annual allowance may be reduced to £10,000.

The lifetime allowance, which governs how much can be sheltered from tax within a taxpayer's pension funds, is set at £1.25 million for 2014/15. This allowance is not changed for 2015/16. 

Future promises

From 2016/17 it is proposed that the lifetime allowance should be reduced to £1 million, but after that the allowance will be increased with the rate of inflation. Taxpayers will be able to protect their personal level of lifetime allowance by making an election.

From 6 April 2016 it is proposed that people who have already purchased pension annuities will be able to cash-in those annuities when they choose. 

Inheritance tax
Immediate changes 

There is no immediate change announced to the application or rates of inheritance tax for individuals. The nil rate band has been frozen at £325,000 until 6 April 2018.

Future promises 

Draft legislation to prevent the use of multiple trusts to avoid inheritance tax was published on 10 December 2014. This legislation will not form part of the next Finance Bill but will be consulted on further alongside rules to simplify the calculation of 10-year charges by trusts.

The Government will review the use of deeds of variation for inheritance tax avoidance purposes. This does not mean anything will change. There have been reviews of the use of deeds of variation before and nothing has happened. 

CGT on homes
People who are not tax-resident in the UK do not pay UK capital gains tax when they sell a property in the UK, although the gain may well be taxed in the country where the individual is tax-resident. 

From 6 April 2015 any gain made on the disposal of a UK residential property will be taxable in the UK, whether or not the owner is resident in the UK. Non-resident owners will only be taxable on the amount of the gain that accrued from 6 April 2015 onwards, and will pay tax at the same rates as they would if a UK resident: 18% or 28% for individuals or 20% for companies. A non-resident individual will be eligible to claim a tax exemption for their main home in the UK if they spend at least 90 midnights in that home in the UK during the tax year. Spending in excess of 90 days in the UK could make the individual tax-resident in the UK for the tax year in question.

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Added By: Luke Noble on 19th Mar 2015 - 16:03
Number of Views: 1617
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