Budget headlines at-a-glance
- From April 2014, the tax free personal allowance will be increased to £10,000 a year.
- From April 2015, the allowance will rise to £10,500 a year.
Married Couples Allowance
- From April 2015 spouses and civil partners can transfer 10% of their personal allowance to each other, which means £1,050 in 2015/16.
- To be eligible to make or receive the transfer, neither party must be liable to tax at the higher or additional rate.
40% rate band
- From April 2014, the threshold for the 40% rate band will rise to £41,865.
- From April 2015, the threshold will rise to £42,285.
- From April 2015, the starting rate of tax for savings income will be reduced from 10% to nil.
- The maximum amount of taxable savings income that can be eligible will rise to £5,000.
- This means that anyone with total income of less than £15,500 per annum will no longer pay any tax on their savings income.
- From 1 July 2014, cash and shares ISAs are to be merged into a New ISA – NISA – with an annual tax-free savings limit of £15,000. Savers will now have complete flexibility over the cash and shares mix within the overall limit of £15,000.
- From 1 June 2014, the cap on Premium Bonds will rise from £30,000 to £40,000, increasing further to £50,000 in 2015/16.
- From August 2014, two £1 million prizes per month will be on offer, instead of the current one.
Author: Guy Smith, Senior Tax Consultant on the ReSource Tax & VAT Consultancy Team.
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