1. Income Tax
Personal allowance 2015/16 (for people born after 5th April 1938)
Autumn Statement legislation will be introduced in Finance Bill2015 to increase the Income Tax personal allowance for 2015/16 for people born after 5th April 1938 to £10,600. The basic rate limit will be £31,785. The higher rate threshold above which individuals pay Income Tax at 40% will be increased to £42,385.
National Insurance limits will increase to stay in line with the higher rate threshold. Income Tax rates will remain at 2014-15 levels for 2015-16.
Blind Person’s Allowance, Married Couple’s Allowance and Income Limit for 2015/16
The Finance Bill 2015 will increase Blind Person’s Allowance and Married Couple’s Allowance to people born before 6th April 1935 and the income limits by amounts equivalent toRetail Price indexation.
Bereavement Support Payment: Income Tax Exemption
Bereavement Support Payment (BSP) paid by the Department for Work and Pensions will be made tax exempt. TheBSP for eligible bereaved husbands, wives and civil partners commencement date is yet to be set by the Secretary of State or the Treasury.
The tax treatment of the existing benefits and pensions currently being paid, (which will be replaced for new claimants by the BSP), will not be affected.
Taxation of Resident Non-Domiciles: Remittance Basis Charge – 6th April 2015 Onwards
Changes will be made to the annual charge paid by non-domiciled individuals, resident in the U.K., who wish to retain access to the remittance basis of taxation. The charge for individuals who have been resident in the U.K. for at least 12 of the last 14 years will be increased to £60,000 and a new charge of £90,000 will be payable by individuals who have been resident in the UK for at least 17 of the 20 tax years. The charge for individuals who have been U.K. resident for at least 7 of the last 9 years has not changed.
The Government will also consult on making the election to pay the remittance basis charge apply for a minimum of three years.
Armed Forces Early Departure Scheme Lump Sums – from 1st April 2015
Legislation will amend the existing Income Tax exemption for lump sum payments made under the Armed Forces Early Departure Payment (EDP) scheme 2005, to ensure that lump sum payments made under the new EDP 2015 scheme are also exempt. There will be a corresponding disregard from Class 1 National Insurance Contributions (NICs).
Digital Gift Aid: Intermediaries
A greater role of intermediaries in administering Gift Aid will be allowed under the new law. It will be easier for donors to give to charity through an intermediary, such as independent fund raisers. A donor will not need to repeat information needed by HMRC to check the validity of a claim for Gift Aid repeatedly.
HMRC will become more flexible about what information charities need to obtain from donors to provide to HMRC in relation to Gift Aid claims.
Bad Debt Relief On Peer-To-Peer Lending
Individuals who make loans through peer-to-peer (P2P) platforms will be allowed to offset bad debts arising against the interest they receive from P2P loans when calculating their taxable income. These changes will have effect for loans made from 6th April 2015. Legislation will be included in Finance Bill 2016 and the Government will publish draft legislation in 2015. The Government will also consult with industry about developing new withholding tax rules for P2P platforms.
ISA Transfer From The Deceased to Spouses
Legislation will be effective from 2015-16, to allow savers an additional Individual Savings Account (ISA) investment allowance where their spouse or civil partner dies on or after 3rd December 2014.
This allowance will be the value of the deceased person’s ISA upon their date of death.
The Government is reviewing taxation of ISA assets during administration of a deceased person’s estate with a view to legislate again in the next Parliament to extend the current ISA tax advantages into this estate administration period.
ISAs New Annual Subscription Limits – from 6th April 2015
The ISA, Junior ISA and Child Trust Fund subscription limits will be increased for 2015-16. The annual ISA subscription limit for 2015/16 will be £15,240. The annual subscription limit for Junior ISA and Child Trust Funds will be £4,080.
ISAs: Qualifying Investments Including Crowd-Funded Debt Securities
The Government will consult on whether crowd-funded debt securities should be qualifying investments for ISAs and how this could be implemented.
Venture Capital Schemes: Social Investment Tax Relief (SITR)
The scope of the Social Investment Tax Relief scheme will be extended following consultation. The amount that can be invested in an individual organisation will be increased. The current limit of £275,000 over a 3 year period will be replaced with anew annual investment limit of £5 million, with an overall limit of £15 million on total investment.
In addition, legislation will be introduced in Finance Bill 2015 to extendSITR to social enterprises that engage in small scale horticultural and agricultural activities that will no longer qualify for subsidies under the European Common Agricultural Policy. The changes will take place as soon as possible on or after 6th April 2015, subject to clearance.
A technical consultation will be carried out in early 2015 on further changes to extend SITR to a wider range of social impact bonds and to provide for qualifying investments to be made indirectly, through a social investment form of a venture capital trust scheme, a ‘Social VCT’.
Miscellaneous Loss Relief Limitations
A new measure to counter avoidance of Income Tax involving miscellaneous losses will be introduced. This measure will deny relief where a loss, or income against which a loss could otherwise be relieved, arises as a result of someone being party to making arrangements a main purpose of which is to obtain a reduction in tax liability by means of miscellaneous loss relief.
Measures limit miscellaneous income against which a miscellaneous loss may be relieved to miscellaneous income that is chargeable to Income Tax under the same provision as the loss would have been had it been profits or income instead of a loss.
The changes denying relief where losses or income arise from tax-avoidance arrangements have effect from 3rd December 2014. The changes limiting relief to miscellaneous income of the same type will have effect for tax year 2015-16 and subsequent years.