The standard rate of Insurance Premium Tax (IPT) will be increased from 9.5% to 10%. This ensures that the impact of the rate increase is spread broadly across the entire general insurance industry.
IPT is a tax on insurers. However, if they do pass the cost of this rate increase onto their business and household customers, the average combined home and contents insurance would only increase by £1, and the average motor insurance premium by £2 per year.
All the revenue raised from this increase in IPT will be invested in flood defence and resilience measures.
As part of the government’s commitment to support home ownership and first-time buyers, the Autumn Statement 2015 announced that from 1 April 2016, higher rates of Stamp Duty Land Tax (SDLT) will apply to purchases of additional residential properties, such as second homes and buy-to-let properties. The higher rates will be 3 percentage points above the current SDLT rates and will apply to purchases of additional residential properties in England, Wales and Northern Ireland.
Following consultation, the government announced in Budget 2016 that it has decided that:
From 6 April 2016 there will be no higher age related personal allowance for people born before 6 April 1938 which means that the basic personal allowance for everyone will be £11,000. This will increase to £11,500 from 6 April 2017.
From 6 April 2016, the Capital Gains Tax (CGT) rate of 18% for non, starting rate and basic rate tax payers will be reduced from 18% to 10% and the 28% rate for higher and additional rate taxpayers (and most trusts) will be reduced to 20%.
The annual exempt amount will remain at £11,100 (for individuals) and £5,550 (for most trusts).
The nil rate band will continue to be frozen at £325,000 until 2020/21.
The rate of IHT during lifetime remains at 20% and the rate on death remains at 40%.
In 2016/17, the annual ISA allowance will remain at £15,240. From 6 April 2017, the annual ISA allowance will then increase to £20,000.
From April 2017, people under the age of 40 will be able to open a Lifetime ISA and contribute up to £4,000 in each tax year. The government will then provide a 25% bonus at the end of the tax year on the contributions that have been made. This means that anyone who saves the maximum amount in the tax year will be subject to a £1000 bonus. Savers will be able to make contributions from the age of 18 up to the age of 50.
The Lifetime ISA aims to help young people save flexibly for the long-term throughout their lives. It will help them to simultaneously save for a first home or for their retirement, without having to choose one over the other.
Opening a Lifetime ISA will work in the same way as opening any other ISA, as will saving into one. Individuals will also be able to transfer their Lifetime ISA in line with the existing ISA rules.
There will however be some additional rules to consider:
Whilst the purpose of the Lifetime ISA is to encourage long term saving for buying a home or saving for retirement, the Government have also stated that they want to ensure that people can access their money for any other purposes. This will however incur a 5% charge, and the bonus element of the fund returned to the Government.
8 days ago
Selling up? It’s important to make your house as appealing as possible to potential buyers. Good decorating can help with first impressions, and increase the perceived value of your property.
27 days ago
With the cost of living affecting so many of us, we have made a list of budget-friendly activities and ideas for you.
21 Jul 2023
Moving soon? It's never too early to get organised! Be prepared and avoid unwanted stress by checking out our list of tips to get you ready for moving day.
27 Jun 2023
Inflation simply put, is the increase in the price of something over time. The Office for National Statistics (ONS) tracks the prices of hundreds of everyday items and these items are updated to reflect shopping trends.
20 Jun 2023
We are often asked if it's good advice to consolidate “unsecured” debt (credit cards and loans etc) into your mortgage, the answer is, sometimes.
16 Jun 2023
When you’re looking to buy a home, and you own a car, you ideally want to know the rules on parking in the area. Parking rules can be confusing, even for the most experienced of drivers! This is why we have written this blog to help you.
6 Jun 2023
There are several potential sources you can consider when it comes to getting together a deposit to buy a property. Providing proof of the source of your deposit is a key requirement in the application process and will need to be given to both the lender and the solicitor.
26 May 2023
Mortgage Prisoners are people who are unable to switch mortgages to a better deal, despite being up-to-date with their mortgage payments.