Here are some changes which may affect your planning from April 2016;
- Pensions- As from April 2016 there will be a reduction in the £40,000 annual pension allowance where income, including pension contributions, exceeds £150,000. The annual allowance will reduce by £1 for every £2 of income in excess of £150,000 down to a minimum or £10,000.
- Personal savings allowance- A new allowance to remove tax on up to £1,000 of savings income for basic rate taxpayers and up to £500 for higher rate taxpayers will be introduced.
- Dividend taxation- Dividend tax credit will be abolished and replaced with a £5,000 dividend tax allowance. Dividend income exceeding the annual allowance will be taxed according to an individuals income tax band. Basic rate taxpayers will pay 7.5%, higher rate 32.5% and an additional rate 38.1%.
- Property- Wear and tear allowance on furnished properties will be replaced with a new relief that will allow residential landlords to deduct the actual costs of replacing furnishing. New rates of stamp duty that are 3% higher then the current bands will be introduced from 1st April 2016 on purchases of additional properties such as buy-to-lets and second homes. Similar changes have been announced to land and buildings transaction tax in Scotland.
For more advice or help on this call our Manchester offices to speak to a member of our team on 0800 020 9542 or email hello@JacRox.co.