Key Points – Summer Budget 2015

Current year:

  • Companies will not be able to claim a deduction for goodwill and customer related intangible assets acquired on or after 8 July 2015, irrespective of how they are acquired
  • Annual Investment Allowance (AIA) reduces to £200,000 from 1 January 2016
  • Direct recovery of tax and tax credit debts (exceeding £1,000) from taxpayers’ bank accounts
  • New conditions for investing in EIS/ SEIS and VCT schemes

From April 2016:

  • Tax free personal allowance set at £11,000
  • Higher rate threshold £43,000 (including personal allowance)
  • Employment allowance rises to £3,000 per year, but not where the director is sole employee
  • Corporation tax rate set at 20%
  • 10% dividend tax credit is abolished
  • £5,000 dividend tax allowance within which no income tax is paid
  • Dividends above £5,000 subject to income tax at 7.5% for basic rate taxpayers, 32.5% for higher rate taxpayers and 38.1% for additional rate taxpayers
  • Flexible ISAs will come into effect which allow savers to withdraw cash from their ISA and reinvest it within the same tax year without affecting their ISA allowance
  • 10% wear and tear allowance for furnished lettings abolished
  • All landlords of residential property (whether fully furnished or not) will be able to claim the actual cost of replacing furnishings
  • Annual allowance for pension contributions tapered down for people with income over £150,000

April 2017:

  • Tax free personal allowance set at £11,200
  • Higher rate threshold £43,600 (including personal allowance)
  • 75% of interest paid by individual landlords eligible for tax relief at their marginal rate, reducing further in 2018 and 2019; balance of interest qualifies for tax relief at 20%
  • Corporation tax rate set at 19%
  • Vehicle excise duty will be reformed for new cars purchased
  • Permanent non-domicile status abolished: anyone UK resident for more than 15 out of 20 tax years will lose non-domiciled status
  • New nil rate band of inheritance tax to set against the main home starts at £100,000