This year a range of tax changes are happening. We highlight the ones that could affect you.
1. Increase in personal tax allowance
No-one will pay any income tax at all from April 2015, if they earn below £10,600.
2. The higher-rate income tax threshold is increasing
The higher rate income tax threshold is rising in April to £42,385 per annum.
3. Carer’s Allowance
From April 2015 the earnings threshold for Carers’ Allowance will be raised to £110 a week.
4. Married couple’s tax break
From 6 April 2015 married couples, or civil partners, who are not higher-rate taxpayers, will be able to transfer £1,000 of their existing personal allowances between themselves so they can limit tax.
5. CGT due on residential property owned by foreigners and ex-pats
As of this year British ex-pats and foreigners who own residential property in the UK will have to pay capital gains tax (CGT).
CGT, however, will only have to be paid on any gains made after April 2015.
6. Independent Living Fund closed
On 30 June 2015 the Independent Living Fund (ILF), which provides financial assistance to help people with disabilities live an independent life in the community , is closing.
Funding will be incorporated into local social care arrangements through local councils in England and devolved governments in Wales. Scotland is making its own arrangements and proposing a new Scottish Independent Living Fund (SILF)
People who already have ILF care packages will have to transfer to new local arrangements.
7. Pensioners will be able to top up their state pension
From October 2015 existing pensioners, and those due to reach state pension age by 6 April 2016, will be able to increase their state pension entitlement.
Pensioners will be able to top up their pension income by up to £25 per week my making a lump sum Class 3A Voluntary National Insurance contribution.
The amount people will need to pay to receive the extra pension will depend on their age. For example, to get an extra £1 a week state pension for life, the lump sum payment for a 65-year-old would be £890, compared to £674 for someone aged 75.
This tax reform has been introduced to help pensioners who will not be eligible for the higher, flat-rate pension coming in next year.
8. Tax Free Childcare
From autumn 2015 Tax Free Childcare is replacing childcare vouchers.
The government will contribute up to 20 per cent of the first £10,000 of registered childcare costs per child, per annum.
The scheme will be available to children under the age of five, and all working parents with children under 12 will be covered within the first year. Disabled children under the age of 17 will also be eligible.
Eligible for the scheme will be those who earn under £150,000 per year and don’t receive help with childcare via tax credits.
9. Winter Fuel Payments removed for certain ex-pats
From Autumn 2015 Winter Fuel Payments will be cut for those living in hot countries.
Winter Fuel Payments will be withdrawn from expats living in a European country with an average winter temperature higher than the UK.
The seven countries affected are: Cyprus, France, Gibraltar, Greece, Malta, Portugal and Spain.
Published on: January 12, 2015