View our key highlights from the Summer Budget
On 8 July 2015 the Chancellor delivered the first Conservative Budget for 19 years. See below for some key highlights which may affect you and to access the EY Summer Budget Report.
Key highlights from the Summer Budget include:
Find out more on the Budget in the EY Summer Budget Report
- Dividend taxation – The government will abolish the Dividend Tax Credit from April 2016 and introduce a new Dividend Tax Allowance of £5,000 a year. The new rates of tax on dividend income above the allowance will be 7.5% for basic rate taxpayers, 32.5% for higher rate taxpayers and 38.1% for additional rate taxpayers.
- Personal savings allowance – As announced at March Budget 2015, the government will introduce an allowance from 6 April 2016 to remove tax on up to £1,000 of savings income for basic rate taxpayers and up to £500 for higher rate taxpayers. Additional rate taxpayers will not receive an allowance. Automatic deduction of 20% income tax by banks and building societies on non-ISA savings will cease from the same date and the government will shortly publish a public consultation on whether changes are required to the deduction arrangements in place for other savings income.
- Making ISAs more flexible – March Budget 2015 announced that the government will change the ISA rules in the autumn to allow individuals to withdraw and replace money from their cash ISA in-year without this replacement counting towards their annual ISA subscription limit. This policy will also cover cash held in stocks and shares ISAs. These changes will commence from 6 April 2016.
- Pensions: reduced Annual Allowance for top earners – The government will restrict the benefits of pensions tax relief for those with incomes, including pension contributions, above £150,000 by tapering away their Annual Allowance to a minimum of £10,000. This policy will come into effect from April 2016.
- Pensions tax relief – The government will consult on whether and how to undertake a wider reform of pensions tax relief.