Personal Taxation Change
The personal tax allowance will rise to £10,600 (instead of the £10,500 originally planned).
The Higher rate tax threshold will also increase to £42,385.
When: Both will take affect from April 2015
What does this mean for me?
Currently the personal tax allowance is £10,000. This change means that you will be able to earn another £600 more tax free.
The higher-rate tax threshold, above which income is taxed at 40%, will also increase from £41,865 to £42,385 in 2015-16 as a direct result of the move to up the tax free personal allowance.
Allowances & Savings Change
ISAs will be transferrable to a surviving spouse of civil partner tax free on death
When: This becomes effective immediately on both cash and stocks & shares ISAs
What does this mean for me? Currently a spouse or civil partner can inherit an ISA but it loses it’s tax free status however, with the changes, any amount held by someone that has dies will be transferrable to their spouse or civil partner without creating a tax liability on death i.e. it does not count as part of their estate for inheritance tax purposes.
Any money you inherit this way will be in addition to any ISA allowance you have.
ISA Limit Change
The ISA limit will increase to £15,240
When: As from April 2015
What does this mean for me? This means that you can save up £15,240 in an ISA without having to pay tax on it.
This is £240 more than the £15,000 limit for 2014/2015. Junior ISA limits have also increase from £4,000 to £4,080
Inheritance Tax Change
The government will no longer be continuing with proposals to introduce a single nil-rate Inheritance Tax band across multiple trusts
What does this mean for me? These were announced in the 2014 budget to attempt to prevent people from taking advantage of the tax rules through establishing multiple trusts. The government are to now consider new rule to target such avoidance.
Change: Extension of the Inheritance Tax exemption
When: For deaths after 19th March 2014
What does this mean for me? People in certain high risk roles are exempt from paying inheritance tax if they die in active service. Previously this included armed forces personnel.
This exemption has now been extended so that is also includes emergency services personnel such as police, firefighters and paramedics as well as being extended to humanitarian aid workers.
Change: Changes to the non-domiciles fee structure
When: No timescale set
What does this mean for me? You must report foreign income or gains of £2,000 or more, or any money that you bring to the UK, in a Self-Assessment tax return.
You can either; pay UK tax on them – you may able to claim it back or claim the remittance basis
Claiming the remittance basis means you only pay UK tax on the income or gains you bring to the UK, but you lose tax-free allowances for Income Tax and Capital Gains Tax (some dual residents may keep them) and you have to pay an annual charge
The Change means that once a non-domiciled person has been resident in the UK for 12 out of the last 14 tax years if he wishes to claim the remittance basis he currently has to pay an annual remittance basis charge (RBC) of £50,000. This will increase to £60,000 from April 2015. A new higher RBC of £90,000 will also apply to remittance basis users who have been resident for 17 out of the last 20 tax years. The RBC of £30,000 for remittance basis users who have been resident for seven out of the previous nine tax years will remain unchanged.
Change: New Pensioners Bonds
When: As from January 2015
What does this mean for me? Special savings bonds for over-65s will be available via NS&I � the Government’s savings arm.
There’s a one-year bond paying 2.8% AER and a three-year bond paying 4% AER.
Bonds can be many things but In this case it refers to a fixed-rate savings account. That means you get a guaranteed rate for a set time and your cash is locked away.
Change: Annuities and Pensions – 55% Pension death tax abolished
When: As from April 2015
What does this mean for me? Individuals will now be able to pass on their unused defined contribution pension savings to a friend or family member on, death tax free (if they die before the age of 75)
Beneficiaries of pension funds left to them by someone aged 75 or over will also now be able to take the funds through drawdown at their marginal tax rate – previously this was only available to dependants.
Change: Joint life and guaranteed term annuities may now be passed to beneficiaries tax free if you die before the age of 75.
When: As from April 2015
What does this mean for me? Beneficiaries of individuals who die under the age of 75 with these types of annuity will be able to receive any future payments from such policies tax-free.
The tax rules are also changing to allow joint life annuities to be passed on to any beneficiary. Currently, you can only nominate your spouse/civil partner or a dependant as the person who receives an income from your annuity after you die.