2015 Budget and what is coming soon

2015 Budget and what is coming soon

 06 April 2015 brings new flexibility for those over the age of 55 preparing to withdraw money from their personal pension pot for the first time. There will be 2 new additional products available:

• Flexi Access Drawdown – Take up to 25% of your pension pot tax free, and 75% remaining will be transferred into a Drawdown product from which withdrawals can be made which will be subject to Income Tax depending on your other income and personal circumstances.

• Uncrystalised Funds Pension Lump Sum – Take any amount from your pension pot and each withdrawal will be 25% tax free and 75% subject to Income Tax depending on your other income and personal circumstances.

• From 06 April 2016 there will be new rules put in place to allow those who already have taken lifetime annuities from their pensions to surrender these for a taxable lump sum.

06 April 2015 brings opportunity for married couples and civil partners (born after 06 April 1935) in a situation where a spouse or partner is not making use of their personal allowance of £10,600, to save £212 of income tax each year. To achieve this the spouse or partner not utilizing all of their personal allowance can request H M Revenue & Customs to transfer £1,060 (as long as they have this available) of this to their tax paying partner as long as they are a basic rate taxpayer and this will save £212 of tax.

06 April 2015 brings changes to how savings interest is taxed if your income is below a certain limit. From 06 April 2015 unless you have a very high income you will have a personal allowance of £10,600 which means that is the amount of your income which is not taxed. If your income is higher than this but less than £15,600 then any savings interest within that limit is not taxable. If this is the case you should use a R85 form to request your bank or building society to pay your interest gross or if not you should request HMRC to refund the tax paid on the interest after the end of the tax year.

From 06 April 2016 £1,000 of interest for basic rate taxpayers and £500 for higher rate taxpayers will be exempt from tax.

The National Savings and Investment 65+ Growth Bonds are still available for investment until 15 May 2015 – 1 year bond yields 2.80% and 3 year bond 4% annually and each with a maximum investment of £10,000.