Savings & Investments

Savings for individuals

Four new measures have been introduced to reduce the tax liabilities for savers.

 

Access to annuities

The government will legislate from April 2016 to allow people who are already receiving income from an annuity to agree with their annuity provider to assign their annuity income to a third party in exchange for a lump sum or an alternative retirement product.

Rather than being charged the current punitive tax rate of at least 55%, tax will be charged at the individual’s marginal tax rate.

 

Flexible ISA

For 2015/16 individuals are able to invest up to £15,240 into an ISA.  From Autumn 2015 individuals will be able to withdraw and replace money from their cash ISA in-year without it counting towards their annual ISA subscription limit.

 

Help to Buy ISA

First time buyers will be able to save up to £200 a month towards their first home with a Help to Buy ISA.  There is also an opportunity to deposit £1,000 when the account is first opened.  The government will boost those savings by 25% up to a maximum of £3,000.  The bonus will be calculated and paid when purchasing the first home and is payable on homes up to £450k in London and up to £250k outside London.  Accounts are limited to one per person rather than one per home, so those buying together can both receive a bonus.  There is a minimum age requirement, so only people aged 16 and above can open the account.

The government intends the scheme to be available from Autumn 2015.

It will only be possible to subscribe to one cash ISA per tax year.

 

Personal Savings Allowance

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.

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May 22

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We changed from our old accountants to Dodd & Co last year and not only did you offer the accountancy service for a cheaper fee than our previous accountants, but you have proved to be more pro-active in giving advice. We were recommended that we change the way we account for VAT and although this is not a huge saving per year, it is better in our pockets than the VAT man's. The main saving to ourselves is the time taken to complete the VAT returns. It was also suggested that we consider becoming a Limited Company rather than a Limited Liability Partnership and we are going to do this at the end of our financial year. This will save us more money, as it will reduce our yearly tax bills. We would recommend using Dodd & Co to any of our clients (or yourselves) and plan to do so in the future.
-- A L Robinson, Johnstons