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Are you ready for the tax changes?

3 February 2016

There are a number of imminent changes to tax allowances, rules and rates that may affect both you and your business. Below is a brief overview of the changes and over the next few weeks we will be posting a series of blogs which will look at different ways you can plan for the coming tax year.

Some changes from April 2016 include:

  • 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 individual’s income tax band. Basic rate taxpayers will pay 7.5%, higher rate 32.5% and additional rate 38.1%
  • 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
  • Pensions
    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 of £10,000
  • Property
    The 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 furnishings
    Rent-a-room relief increases from £4,250 to £7,500.
    New rates of stamp duty that are 3% higher than the current bands will be introduced from 1 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

If you would like a chat with a member of our team about your tax planning, or anything else that you may need help with, please get in touch.

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