As the dust settles on another Budget, it’s clear that #Budget2015 didn’t pack the same punch as last year’s, which turned retirement and inheritance tax planning on its head. It managed, nonetheless, to land a number of softer blows that still makes the head spin.
The key points are listed below. However, if you want analysis of the detail our Technical Support Unit is hosting a webinar at 11am on Friday in which they’ll be poring over what Mr Osborne’s “four major new steps in our savings revolution” and “radically more flexible ISA” mean in practice for you and your clients – registration details at the end of this.
And if tax is your thing, we’ve produced a 2015/16 Tax Rates at a Glance guide, which you can access here.
Death benefits: annuities
The Finance Bill 2015 will include measures to extend the payment of annuities to beneficiaries on the death of pension scheme members, as well as amending the tax treatment of payments made under such annuities. The extension and amendments broadly mirror the drawdown changes introduced by the Taxation of Pensions Act 2014.
Reducing from £1.25m to £1m from April 2016. The lifetime allowance will then be indexed in line with CPI from 6 April 2018. Fixed and individual protection regimes will be introduced alongside the reduction in the lifetime allowance to protect savers who think they may be affected by this change.
Government will legislate from April 2016 to allow people who are already receiving income from an annuity to agree with their annuity provider to assign their annuity income to a third party in exchange for a lump sum or an alternative retirement product.
Increased flexibility – Regulations will be introduced in Autumn 2015 to enable ISA savers to withdraw and replace money in the same tax year from their cash ISA without it counting towards their annual ISA subscription limit for that year.
Help to Buy ISA- The scheme will provide a government bonus to each person who has saved into a Help to Buy ISA at the point they use these savings to purchase their first home. For every £200 a first time buyer saves the Government will provide a £50 bonus up to a maximum of £3,000 on £12,000 of savings. The minimum bonus which can be claimed is £400 and the maximum bonus is £3,000.
Deeds of variation
There is to be a review of the use of deeds of variation to avoid inheritance tax. A report should be available by the Autumn.
End of the tax return
Tax returns will be replaced by digital tax accounts for millions of individuals and businesses.
By early 2016 five million small businesses and ten million individuals will have access to their own digital tax account. It’s intended that millions of people will no longer have to complete a tax return at all whilst those with more complex tax affairs will be able to use their account to declare income and pay tax in the year.
You can register for the webinar here.