TAX HIGHLIGHTS FROM THE BUDGET

Personal tax

Income Tax, personal allowances, rates of tax and thresholds for 2015 to 2016. For 2015 to 2016 the personal allowance will increase to £10,500 and the basic rate limit will be £31,785;

For 2015 to 2016 the starting rate for savings income will reduce from 10% to 0%, and the maximum amount of an individual’s savings income that can qualify for this starting rate will increase to £5,000;

New Individual Savings Accounts (NISA), Junior ISA and Child Trust Fund (CTF): increasing flexibility for savers and investors. With effect from 1 July 2014 the annual subscription limit for cash and stocks and shares ISA will be equalised at £15,000, and restrictions on the transfer of funds between stocks and shares and cash ISAs will be removed;

With effect from 1 July 2014 the annual subscription limit for Junior ISA and CTF will be increased from £3,840 to £4,000.

Personal allowances for non-residents

The government intends to consult on whether and how the personal allowance could be restricted to UK residents and those living overseas who have strong economic connections in the UK, as is the case in many other countries, including most of the EU.

Capital Gains Tax (CGT): non-residents and UK residential property

As announced in Autumn Statement 2013, legislation will be introduced to charge CGT on future gains made by non-residents disposing of UK residential property.  A consultation on how best to produce the charge will be published shortly after Budget.  These changes will have effect from April 2015.

National Insurance contributions: simplification for the self-employed

The government will introduce legislation to simplify the administrative process for the self-employed by using the Self-Assessment to collect Class 2 National Insurance contributions alongside Income Tax and Class 4 National Insurance contributions.