The Chancellor of the Exchequer revealed some surprises as well as confirming several well-trailed proposals in his Budget Statement earlier this afternoon.
In the first budget of a Conservative government since late 1996, George Osborne unveiled several tax-related changes in the following areas:
Corporation Tax goodwill amortisation – tax relief withdrawn for acquisitions on/after 8 July 2015
Corporation Tax – reduction in rate from 20% to 19% (2017) and then to 18% (2020)
Dividend Taxation – abolition of the Dividend Tax Credit, a new £5,000 Dividend tax Allowance and revised tax rates for dividend income (7.5%, 32.5% and 38.1% for basic, higher and additional rate taxpayers respectively) – from April 2016
Inheritance Tax – additional relief from IHT for the family home; an additional £100,000 pa per spouse/civil partner to be tax-free from April 2017, rising to £175,000 from April 2020
Annual Investment Allowance – for qualifying capital expenditure of up to £200,000 pa, from January 2016
Personal Allowance increasing to £11,000 (April 2016) and then £11,200 (April 2017)
Higher rate threshold increasing to £43,000 (April 2016) and £43,600 (April 2017)
Restriction of Income Tax relief on finance costs (interest) for buy-to-let landlords, phased in over 4 years from April 2017 onwards
Employment Allowance – Employer NIC allowance increases to £3,000 pa from April 2016
Non-domicile status (for Income Tax, CGT and IHT) to be abolished for individuals who are UK resident on 15 of the last 20 years (from April 2017) and for UK-born individuals (from April 2017); charge to IHT on UK residential property, also from April 2017
Pension tax relief – restriction of relief for those with income in excess of £150,000 pa; annual allowance to be tapered down from £40,000 to £10,000 pa – from April 2016
Tax Credits – where income exceeds the threshold, tax credits to be withdrawn at a rate of 48% (increasing from 41%) from April 2016
This is snapshot summary of the headline areas. The full GMcG Budget Summary is now available here.