2015 Budget Summary

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2015 Budget Summary

Is Britain walking tall again? The chancellor claims it is. This was one of many announcements made as he embarked upon his sixth budget speech. Growth is now forecast to rise to 2.5 per cent this year and 2.3 per cent in 2016, he said. As such, borrowing estimates were lowered. Here at WPS Financial Group we have broken down the key facts for you regarding the 2015 Budget.

Inheritance Tax

As part of a review of tax avoidance, the government announced it is looking into the use of deeds of variation. This is where a will is varied within two years of the death of the testator and the beneficiary who is impacted by the variation agrees to the change. The consultation is scheduled for the Autumn.

Pensions

The lifetime allowance will reduce from £1.25m to £1m from 6 April 2016. There will be new fund protection options introduced to allow those with funds in excess of this limit to protect the greater amount held. Indexation of the lifetime allowance in line with CPI will be introduced from 6 April 2018. This will be a welcome announcement for those able to build up significant pension savings.

Annuities

The government will legislate from April 2016 to allow people who are already receiving income from an annuity to agree with their annuity provider to assign their annuity income to a third party in exchange for a lump sum or an alternative retirement product.

Income Tax 

The income tax personal allowance will increase from £10,600 to £10,800 from 6 April 2016 and then to £11,000 from 6 April 2017. The eventual aim is to reach a personal allowance of £12,000.

ISAs

Regulations will be introduced in Autumn 2015, following consultation on the technical detail, to enable ISA savers to withdraw and replace money from their cash ISA in the tax year, without it counting towards their annual ISA subscription limit for that year.

Help to Buy ISA

To help first time buyers save a deposit for a property, the government is launching ‘help to buy ISAs’ in Autumn 2015. For every £200 a first time buyer saves, the government will provide a £50 bonus up to a maximum bonus of £3,000 on £12,000 of savings. Savers will have access to their own money and will be able to withdraw funds from their account if they need them for another purpose but the bonus will only be made available for home purchase.