Summer Budget Highlights for Personal Tax:
The Personal tax Allowance will rise to £11,000 for 2016-2017.
The rate before paying tax at 40% will rise to £43,000 for 2016-2017.
Buy to Let Landlords the mortgage interest relief is to be restricted to basic rate with the change to be introduced over 4 years from April 2017.
Finally there is a big shake up of the way the taxation of dividends will be treated.
Currently dividends are treated as having had 10% tax deducted at source.
From April 2016 everyone will receive the first £5000 of dividend income tax free and then above the £5000 you will pay at a new rate as follows:-
- Basic Rate (20%) taxpayers will pay at 7.5%
- Higher Rate (40%) taxpayers will pay at 32.5%
- Additional Rate (45%) taxpayers will pay at 38.1%
If you have any queries on how this will affect you, please give me, Emma Thomas, a call on 01803 202052 and I will be happy to discuss this with you.