Chancellor George Osborne delivered the Spring Budget Statement on 16 March 2016. Following is an overview of the main points set out in the Budget. Please note that these may change before becoming law.
- There will be an extra transferable IHT nil-rate band for main residences passed on death to direct descendants, starting at £100,000 in 2017/2018 and rising to £175,000 in 2020/21.
- There have been small increases made to Personal Allowances for Income Tax but no change to the rates which are currently 20%, 40% and 45%. (Please see our updated Individual Tax Rates on the Latest News page for full details).
- Capital Gains Tax has been cut from 28% to 20% and from 18% to 10% for basic rate tax payers. This applies to Stocks and Shares, ISAs and Unit Trusts but not to property or land.
- There is a new Lifetime ISA for the under-40’s, with the government putting in £1 for every £4 saved. People who save a maximum of £4,000 towards a home deposit or retirement will receive a £1,000 top-up from the state every year until they they turn 50.
- Dividend Tax Credit will was abolished from April 2016 and there will be a new dividend tax allowance of £5,000 a year. Above that level the tax rates on dividends have risen by 7.5%.
- The Pension Lifetime Allowance has been reduced from £1.25 million to £1 million and transitional protection for pension funds that are already over £1 million have been introduced.
- The National Insurance Contribution (NIC) employment allowance of £2,000 has risen to £3,000 from April 2016.
- Insurance premium tax is to rise from 9.5% to 10%.
- A new Sugar Tax on the soft drinks industry is to be introduced in 2 year’s time, raising £520m a year to be spent on doubling funding for primary school sport in England.
- Fuel duty is to be frozen at 57.95p per litre for the sixth year in a row.
- Beer, cider, and spirits duties are to be frozen but there is a rise in duties on wine and other alcohol.
- Excise duties on tobacco will rise by 2% above inflation.
Spring Budget Statement – April 2016