Personal tax

  • Income tax rates for 2016/17: remain at 20% for the basic rate, 40% for the higher rate and 45% for the additional rate.
  • Personal allowance: will rise to £11,500 in 2017/18.
  • Higher rate threshold: will rise to £45,000 in 2017/18.
  • Personal savings allowance: £1,000 of interest tax-free for basic-rate taxpayers, £500 for higher rate taxpayers, and nil for additional rate taxpayers, from 6 April 2016.
  • Deduction of tax at source: to cease for interest paid by banks, building societies and National Savings and Investments from 6 April 2016.
  • Dividends: abolition of tax credit, £5,000 nil-rate allowance and increased tax rates, from 6 April 2016.
  • Capital gains tax (CGT): rate on most gains for basic rate taxpayers reduced from 18% to 10%, and for higher rate taxpayers from 28% to 20% from 6 April 2016.
  • CGT rates for residential properties and carried interest: remain at 18% for basic rate taxpayers and 28% for higher rate taxpayers.
  • CGT entrepreneurs’ relief: certain anomalies introduced by last year’s changes corrected from the time of their introduction; affecting associated disposals, goodwill on incorporation, and the treatment of joint ventures and partnerships.
  • CGT entrepreneurs’ relief extended to external investors: where individuals hold ordinary shares in unlisted trading companies that were acquired for new consideration; applies to qualifying shares bought on or after 17 March 2016 and held for at least three years on or after 6 April 2016.
  • CGT on non-residents disposing of UK residential property: technical changes to remove anomalies; the Treasury empowered to prescribe circumstances when no return required; and CGT added to taxes that may be collected under Provisional Collection of Taxes Act 1968, from various dates.
  • Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs): clarifications to changes made last year, broadly with effect from 18 November 2015.
  • VCTs: clarification of the non-qualifying investments that a trust may make for liquidity management purposes, from 6 April 2016.
  • EIS, Seed Enterprise Investment Scheme and VCTs: all remaining energy generation activities excluded from 6 April 2016.
  • Individual Savings Accounts (ISAs): ISAs to retain tax advantages during administration of estate, from a date to be appointed.
  • Northern Ireland ‘top-ups’ to non-taxable welfare benefits: exempt from income tax (provisions to be introduced during the Bill’s passage through Parliament).