Chancellor George Osborne unveiled a series of significant measures in his 2014 Budget. Here are some affecting individuals.
Allowances and rate bands: From April 6, 2015 the personal allowance for all those born after April 5, 1948 will be £10,500; the basic rate limit will be reduced to £31,785; and the starting rate of savings tax will be 0% and will apply to a maximum of £5,000.
Pensions: The Chancellor announced a series of changes, in order to: increase the maximum income that a drawdown pensioner with a capped drawdown pension fund can choose to receive, to 150% of the ‘basis amount’; reduce the minimum income threshold for flexible drawdown to £12,000; allow members over 60 with total pension savings of £30,000 or less to take out the savings as one or more trivial commutation lump sum; and increase the size of a small pension pot which can be taken as a lump sum from £2,000 to £10,000 and the number of personal pension pots that can be taken as a lump sum under the small pot rules to three.
The New ISA: From July 1, ISAs will be reformed into the ‘New ISA’ (NISA). From that date all existing ISAs will become NISAs, and the overall annual subscription limit will increase to £15,000 for 2014/15.
ISA savers will be able to subscribe this full amount to a cash account and will be able to transfer their investment from a stocks and shares to a cash account and vice versa.
High value residential property: The Government will introduce two new bands for the Annual Tax on Enveloped Dwellings (ATED). Residential properties worth over £1m and up to £2m will be brought into the charge with effect from April 1, 2015. The charge in 2015/16 will be £7,000.
Properties worth over £500,000 and up to £1m will be brought into the charge from April 1, 2016, which for 2016/17 will be £3,500.