Capital Gains Tax (CGT) - Annual exemption
The CGT annual exemption is currently £11,000 for individuals. This will increase to £11,100 for 2015/16. The rates will remain at 18% and 28%.
The Government will introduce an online digital calculator to help taxpayers calculate their CGT liability.
As of 3 December 2014, Entrepreneurs' Relief will no longer be available on the disposal of goodwill to a related close company. This means that individuals and trusts disposing of a company which they control will no longer be able to benefit from a lower (10%) CGT rate when they dispose of the goodwill within their business to a company.
The income tax personal allowance will increase from £10,000 to £10,600 from April 2015.
The personal allowance is to be reduced by £1 for every £2 of taxable income over £100,000. This means that those with income over £121,200 are to lose their personal allowance. For those who have taxable income in excess of £150,000, the additional 45% tax rate will continue to apply on that excess.
The basic rate of income tax is currently 20%. The band of income taxable at this rate is currently £41,865 (after accounting for this year's personal allowance). From April 2015, the threshold at which the 40% higher rate tax band will apply is to increase to £42,385 for those entitled to the full personal allowance.
Inheritance Tax (IHT)
The nil rate band remains frozen at £325,000 until April 2018. With the nil rate band still frozen at its 2009 rate, the importance of careful IHT planning is greater than ever, especially as we are seeing property prices starting to increase as we emerge from the recession.
Exemption for emergency services personnel and humanitarian aid workers
The IHT exemption for members of the armed forces whose death is caused by injury whilst on active service will be extended to members of the emergency services or humanitarian aid workers responding to emergency circumstances. This extension is to have effect for deaths on or after 19 March 2014.