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CHANGES FROM APRIL 2016
Basics
Planned changes may affect your planning for 2015/16. Some changes from April 2016 include:
Dividend Taxation
Dividend tax credit will be abolished and replaced with a £5,000 dividend tax allowance. Dividend income exceeding the
annual allowance will be taxed according to an individual’s income tax band. Basic rate taxpayers will pay 7.5%, higher rate
32.5% and additional rate 38.1%.
Personal Savings Allowance
A new allowance to remove tax on up to £1,000 of savings income for basic rate taxpayers and up to £500 for higher rate
taxpayers will be introduced.
Pensions
There will be a reduction in the £40,000 annual pension allowance where income, including pension contributions, exceeds
£150,000. The annual allowance will reduce by £1 for every £2 of income in excess of £150,000, down to a minimum of
£10,000.
Property
The wear and tear allowance on furnished properties will be replaced with a new relief that will allow residential landlords to
deduct the actual costs of replacing furnishings.
Rent-a-room relief increases from £4,250 to £7,500.
New rates of stamp duty that are 3% higher than the current bands will be introduced from 1 April 2016 on purchases of
additional properties such as buy-to-lets and second homes. Similar changes have been announced to land and buildings
transaction tax in Scotland.
UPCOMING CHANGES
Allowances, rules and rates from April 2016
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