Savers - Flexible ISAs
More flexible ISAs will allow people to take money out of their account and return it in the same tax year without losing any of their ISA subscription limit.
The annual savings limit for ISAs is to be increased to £15,240.
As announced in last year's Budget, the premium bond investment limit is set to increase from £40,000 to £50,000 in June 2015.
Abolition of the annual self assessment tax return
The Government has announced plans to abolish the annual Self Assessment Tax Return in exchange for a new Digital Tax Account system in an attempt to reduce administration and simplify tax reporting.
By early 2016, five million small businesses and ten million individuals will use the new Digital Tax Account which will allow them to review and update their tax information on a regular basis.
The Digital Tax Account system will initially have the capability to obtain information direct in respect of employment earnings, bank and building society accounts, with a view to linking business accounting software which will automatically upload self employment earning details by 2020.
Further details on the proposal will be published later this year.
Income tax personal allowance
From 6 April 2015, the basic personal allowance will increase from £10,000 to £10,600. If you were born before 6 April 1938, you will be entitled to the age-related personal allowance which remains at £10,660.
The Government plans to align personal allowances and as from 6 April 2016, there will only be one personal allowance, regardless of age, and this will be £10,800.
In 2015/16, if you are a higher rate taxpayer, then your age-related personal allowance will be reduced by £1 for every £2 of income over £27,700. However, the allowance will not go below the basic personal allowance of £10,600.
As in previous years, if your income is over £100,000, your personal allowance will be reduced by £1 for every £2 of income over this amount. If you earn over £121,200, then you will no longer be entitled to a basic personal allowance.
Capital Gains Tax ("CGT")
The rates of CGT remain 18% and 28% for individuals. The annual exemption increases to £11,100 for 2015/16.
Inheritance Tax ("IHT")
The IHT 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.