Are you ready for the tax changes?
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
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
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.