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Budget news

Budget News

Well if you were waiting for something exciting in the budget, your probably still waiting.

ISA's

The government will make it possible for people to withdraw monies from an ISA without losing the tax free allowance in that tax year and subsequently put money back in in the same tax year upto the allowance ( £15,240 from  06/04/2015).

It also unveiled a ‘help to buy’ ISA which would see the government top up contributions for those saving for a deposit for their first home. For every £200 saved, the government would top it up by £50, up to £3,000.

Personal allowance

The tax-free personal allowance is being increased to £10,600 for 2015/2016, £10,800 in 2016-17, and £11,000 in 2017-18.

 
For higher rate taxpayers, the Government will also increase the threshold above which higher earners start paying 40% tax. It will increase to £42,700 in 2016-17, and to £43,300 in 2017-18.

Tax-free personal savings allowance

From April 2016 a tax-free personal savings allowance of £1,000 will be introduced on the interest earned on savings. Therefore savers will be entitled to the first £1,000 of interest gross with no further liability.

To facilitate this, banks and building societies will stop deducting 20% income tax from interest earned on savings from April 2016.

Pensions

The overall tax privileged pension saving an individual can accrue in their lifetime (the lifetime allowance) will reduce from £1.25m to £1m from 6 April 2016.

From April 2016 pensioners will, subject to agreement from their annuity provider, be able to sell the income they receive from their annuities to a third party in exchange for a lump sum. The annuitant can take the lump sum directly (subject to income tax), or it can be transferred to flexi-access drawdown or a flexible annuity product where income can be taken more gradually.

The most important development in pensions was announced at the last budget but takes effect from 05/04/2015..Pension holders will have access to the first 25% tax free, then all their pension pots, subject to their marginal rate of income tax...

This remains the big news and presents opportunities for individuals with the right planning.

That's all for now.