Budget 2015 Summary
There weren't a lot of massive changes that are likely to significantly affect our members in today's Budget.
Key announcements were:
Personal allowance
The personal tax free allowance is to go up to £10,800 in 2016/17 and £11,000 in 2017-18.
In 2016-17 the basic rate limit will be £31,900 meaning that the higher rate threshold above which individuals pay income tax at 40% will be increased to £42,700. In 2017-18 the higher rate threshold will be £43,300.
The National Insurance upper earnings and upper profits limits will increase to stay in line with the higher rate threshold.
Abolishing Class 2 NIC
Class 2 NIC's are paid by the self employed although only at a rate of around £2 per week. They plan to abolish these at some point in the next Parliament.
Deed of variation
They will be starting a consultation of how these are being used to avoid tax/IHT.
Personal savings allowance
The main change is the new Personal Savings Allowance. From April 2016 the first £1,000 of savings interest earned by basic rate taxpayers will be free of income tax. Higher rate taxpayers will have an allowance of £500. If you earn above £150,000 it doesn't appear that you'll qualify for the personal savings allowance.
The automatic deduction of 20% tax at source from bank/building society interest will also stop.
In the 2014 Budget 2014, it was announced that from April 2015 you won't have to pay tax on your interest if your taxable income is less than £15,600.
When you add in the £1,000 new allowance you won't have to pay tax on your interest if your taxable income is less than £16,600.
Capital Gains Tax
Not many additional changes here as the main change for non UK residents being within the scope of CGT has already been announced.
One change is to amend the tax legislation so that for Entrepreneur Relief purposes the definitions of a 'trading company' and 'the holding company of a trading group' do not take account of activities carried on by joint venture companies which a company is invested in, or of partnerships of which a company is a member. This will ensure that a company would need to have a significant trade of its own in order to be considered as a trading company. This is to combat the use of Joint Venture companies to increase Entrepreneurs Relief.
ISA changes
The ISA will be more flexible (allowing you to take money out and repay it before the end of the tax year) and there will also be a "help to buy" ISA for first time buyers.
Most of the big changes have been announced over the last 12 months including:
Other changes
The Treasury has also reported other potential changes including a new IHT relief for a main residence left to children. This could potentially exempt properties valued at up to £1M from IHT. We look at this in this Gold members article:
New IHT main residence nil rate band to exempt certain properties up to £1M
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