Why this tax year could be a great year for investors and savers…

 

 

 

 

 

Further to speculation of what the changes might be during the Spring Budget, on 16th March Chancellor George Osborne made his speech, which appeared to bring a lot of good news for investors and savers.

Not only were pension taxes left untouched and the minimum income raised before having to pay tax, but a whole host of changes to ISAs were announced, coming in to play from April 2017. These include:

  • The ISA limit increasing to £20,000 in April 2017.
  • A new Lifetime ISA will be introduced in April 2017 for the under-40s.
    • The allowance will be £4,000, which will form part of the £20,000 total ISA allowance.
    • Investors will receive a £1 government top-up for each £4 saved, added at the end of each tax year.
    • Investors can withdraw their capital tax-free to buy their first house (up to a value of £450,000), after the age of 60 or if terminally ill. Other exceptions may apply.
    • Withdrawals at any other time will have a 25% charge.
  • Capital gains tax on investments has been cut by 8 percentage points
    • From 6 April 2016 the higher rate will be 20% and the basic rate 10%.
    • This reduction will not apply to a gain made on a residential property which is not the individual’s main home (e.g. second homes and buy-to-let).

Have we got you thinking about your savings and investments? Need some advice? Get in touch with us to arrange a complimentary consultation with one of our advisers.

Featured in Welsh Border Life May 2016

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