2015 Summer Budget SummaryPosted 2015 by admin
Whatever your political persuasion no-one could accuse the Chancellor of delivering a boring Budget. Despite the triple tax-lock announced prior to the election the Chancellor certainly did not miss the opportunity to propose numerous policies to raise taxes.
So what are the key points?
- Personal allowances for individuals will be increased to £11,000 for 2016/17 and £11,200 for 2017/18 both higher than previously announced;
- The higher rate threshold will be £32,000 for 2016/17 and £32,400 for 2017/18;
- A new tax on dividends. The first £5,000 of dividends will be tax free then the remainder will be taxed at 7.5%, 32.5% and 38.1% for basic rate, higher rate and additional rate taxpayers respectively. This will certainly lessen the attraction of incorporation;
- Corporation tax rates will be reduced to 18% by 2020;
- A permanent increase in the Annual Investment Allowance to £200,000 from January 2016.
- A restriction in the tax relief available on the purchase of Goodwill by companies. This will affect the tax relief available to acquiring companies and almost certainly the sales price that can be achieved by those companies looking to sell their goodwill;
- From April 2017 anyone resident for more than 15 of the previous 20 years will no longer be able to claim Non-Domiciled status for tax purposes.
- An improvement to Inheritance relief on the family home means that a couple with assets including a home worth more than £350,000 will by 2020/21 be able to leave up to £1 million of assets entirely tax free to their children or other linear descendants;
- From 2017/18 higher rate tax relief on interest used to acquire a buy to let property will be phased out;
- The annual Wear and Tear Allowance available on furnished let properties will be withdrawn from April 2016.
- A substantial increase from the current 6% to 9.5% in Insurance Premium Tax that will affect us all;
- As previously announced, as part of the Government’s major review of the pension system, tax relief on pensions for those earning above £150,000 will be restricted;
The above is just a brief summary of the announcements and as ever the devil will be in the detail. If you have any questions on the Budget proposals or how they may affect you, please do contact me.