July 2015 Budget – summary
08 Jul 2015
In the 2015 Summer Budget delivered on the 8th July 2015, the Chancellor George Osborne announced the following key tax measures;
- Corporation tax rate to be cut to 19% by 2017 and to 18% by 2020 in a bid to create more jobs;
- The AIA will be increased from £25,000 to £200,000 for all qualifying investment in plant and machinery made on or after 1 January 2016;
- Restriction of the corporation tax relief a company may obtain for the cost of ‘goodwill’ (the reputation and customer relationships associated with a business). This will affect all acquisitions and disposals on or after 8 July 2015.
- Permanent non-dom tax status will be abolished from April 2017, with individuals who have lived in the UK for 15 of the past 20 years losing the right to claim it;
- Restriction of income tax relief on residential property finance costs (such as mortgage interest) for landlords to basic rate of tax only from April 2017;
- An increase in the inheritance tax threshold to £1m for married couples by 2017;
- A reduction in the Lifetime Allowance for pension contributions from £1.25 million to £1 million from 6 April 2016. The Lifetime Allowance will be indexed annually in line with CPI from 6 April 2018.
- Abolition of the Dividend Tax Credit from April 2016 and introduction of a new Dividend Tax Allowance of £5,000 a year. The new rates of tax on dividend income above the allowance will be 7.5% for basic rate taxpayers, 32.5% for higher rate taxpayers and 38.1% for additional rate taxpayers.
- Personal tax allowance to rise to £11,000 next year;
- Annual tax relief on pension contributions to be limited to £10,000 a year (for those earning over £150,000 a year);
- An increase in the annual National Insurance Contributions Employment Allowance from £2,000 to £3,000.
Please click here to read a more detailed report of the budget.
Further information on these new measures will be available shortly. For detailed information and advice on how these measures may affect you, please speak to your usual Beavis Morgan partner