So, the 6th of April brings in the new tax year with new rules, but what are the changes?
- Personal Allowance – increases to £11,000.
- Personal Savings Allowance – if you are in the 20% band for income tax, you will pay no tax on the first £1,000 of interest you get from savings. If you are a 40% taxpayer, you are allowed to earn £500 of interest tax-free ,rather than £1,000.
- ISA limits
- ISA – £15,240
- Junior Isa limit- £4,080
- Child trust fund limit- £4,080
- National living wage – 25 and overs are now entitled to a minimum pay of £7.20 per hour.
- Dividend Allowance – The first £5,000 you receive in dividends is tax free. Above £5,000, basic-rate taxpayers will pay 7.5% tax, higher-rate taxpayers 32.5%, and additional rate taxpayers 38.1%.
- Employment Allowance – The new amount of £3,000 can be reclaimed against employers NI.
- Tax on Loans to Directors -The 25% tax charge on loans to directors, etc. increases to 32.5%.
- Capital Gains Tax – The higher rate of capital gains tax is reducing from 28% to 20% and the basic rate from 18% to 10%. However, the new rates will not apply to residential property that does not qualify for private residence relief.
- Vat Registration – The thresholds increase to £83,000 for registration and £81,000 for deregistration.
- Landlords and Second-home Owners – Will have to pay an extra 3% in stamp duty for second properties bought after 1 April 2016. This is on top of the normal rates (0% on the first £125,000; 2% for £125,001 to 250,000; 5% for £250,001 to £925,000; 10% for £925,001 to £1.5m, and 12% above £1.5m).
If you have any questions regarding the changes, please do not hesitate to contact us.
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.
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