Budget 2015 bullet point summary
George Osborne has unveiled his final Budget before the general election. So what was in this year's budget and what will this mean for you.
Income tax
- Personal allowance is to go up from £10,000 to £10,600 this year (which was previously announced), £10,800 in 2016 and £11,000 in 2017/18. The personal allowance is the amount of money you can earn before you start paying tax and applies to everybody earning up to £100,000. This allowance is reduced when earnings are above £100,000, for every £2 of income the personal allowance is reduced by £1.
- Higher rate tax threshold to increase to £43,300 in 2017. Currently it is £41,865 and is already due to increase to £42,385 in April.
- The transferable tax allowance for married couples will increase from the current £1,050 to £1,100.
- Annual tax return will cease to exist within the next five years. Tax affairs of millions of Britons will be held online and collated from information held by employers, banks and investment firms.
National Insurance
- Class 2 National Insurance contributions to be scrapped in next Parliament.
Pensions
- Pension lifetime allowance is to be reduced again, this time from £1.25m to £1m after April 2016, while from 2018 this allowance will rise with inflation. The lifetime allowance is the maximum amount of pension that can be paid out without triggering a tax charge.
- From April 2016 people already receiving income from an annuity will be allowed to sell that annuity to a third party, subject to agreement from the annuity provider. This will allow those currently locked into an annuity the pension freedoms announced in last year's Budget that come into effect from 6th April 2015.
Inheritance tax
- Government to review the use of 'deeds of variation' which allow wills to be altered after the donor's death.
Savings
- The first £1,000 of interest on savings will be free of tax removing the vast majority of savers from taxation, this is limited to £500 for higher rate taxpayers.
- A new Help to Buy Isa will allow prospective first-time buyers to get a bonus when saving for a deposit, a bonus of £50 will be added to every £200 saved up to a maximum of £3,000.
- Changes will be made to Isa rules to allow savers to take out money and put it back at a later date without losing the tax-free status.
Duty
- Increase on fuel duty planned for September will be scrapped.
- Duty on beer will be cut by 1p on a pint and 2% on cider and spirits, duty on wine remains unchanged.
