Summer Budget 2015 – our immediate reactions

In the first Conservative majority government budget for 19 years there were certainly some surprises. Here is our summary of the tax changes most likely to affect our clients:

• Corporation tax payment dates brought forward for companies with profits greater than £20m.

• Insurance premium tax to increase to 9.5% from November 2015

• Buy to let landlords to suffer restriction on higher rate tax relief on mortgage/loan interest, to be phased in over four years

• Rent a room relief’ to increase to £7,500 from next year

• Confirmation of the already announced reliefs for  IHT on the family home to £1m

• Pension contribution reliefs for those in the 45% tax band to be restricted to £10,000 per annum

• Annual investment allowance ( capital allowances) to reduce to £200,000 from 1 January 2016 (currently £500,000)

• Dividend tax regime to change to provide a tax free allowance of £5,000. Dividend tax rates to go up significantly to 7.5 % (basic rate),  32.5%  (higher rate tax) and 38.1% (additional rate tax) – all from April 2016

• Corporation tax rates to reduce to 19% in 2017 and 18% by 2020

• Tax thresholds to change – personal allowance to be £11k from next year and higher rate threshold £43,000 from next year

• New national living wage announced starting at £7.20 (for full time work this means £14,040) next year rising to £9 by 2020 (for full time work this means £17,550) for all 25+ year olds

• National insurance employment allowance to increase to £3,000 from 2016 to help small employers bear the new living wage

• Non dom status to be abolishes for individuals who have been resident in the UK for 15 years

Our more detailed analysis will be available soon, also watch out for our article next week in Your Move magazine.