Partner Tessa Till highlights the key points for you from yesterday’s Budget.
A bit more money in your pocket:
• The tax-free personal allowance will rise to £10,800 in 2015-16 and £11,000 in 2016-17.
• Higher earners benefit – with the increase in the personal allowance you won’t start paying 40% income tax until your income exceeds £43,300.
Saving for a rainy day?
• The first £1,000 of interest earned on savings income will be tax-free.
• Annual savings limit for ISAs increased to £15,240 and you can take money out and put it back in without losing the tax-free allowance.
A helping hand to buy your first property
• New “Help to Buy” ISA means you will get £50 for every £200 you save for your deposit.
Time to think about your pension planning?
• The pension pot lifetime allowance is to be lowered from £1.25 million to £1 million from next year so if you are getting close to retirement you need to review your pension. Money taken out over and above this limit will trigger a tax charge.
Good news for pension annuities
• You will be able to access your annuity with tax applied at your own marginal rate. The 55% rate of tax will be abolished.
Are you a beneficiary of a deceased relative’s estate?
• If so, the option to do a bit of tax planning by entering into a deed of variation after your relative has died might soon not be an option – this is to be reviewed so it’s best to get this done as soon as possible. You currently have 2 years from your relative’s death to complete this.
We will all need to get “online”:
• No more paper income tax returns – submission will now be online
On a lighter note beer, cider and whisky duty have all been cut.
For any further information on the Budget or advice please contact Tessa