Budget Changes Overview

Introduction of the Lifetime ISA (Lisa)

With effect from April 2017 the government have proposed a new Lifetime NISA that will be available to everyone under the age of 40 and the total amount you can save into a NISA will be increased to £20,000. Initially the maximum that you can save into a lifetime NISA will be £4,000 a year of which you will receive a government bonus of 25% on an annual basis at the end of each tax year.

After the age of 60 you can take your savings out tax free. If you withdraw the monies at any time before age 60 you will lose the government bonus, any interest or growth on the bonus and suffer a 5% penalty unless you are using the funds to purchase a first home.

Income Tax

From April 2017 the Personal Allowance (Tax free amount) will be increased to £11,500 and the rate in which you start paying the higher rate of income tax will increase to £45,000.

Capital Gains Tax (CGT)

From 6th April 2016 Capital Gains Tax (CGT) will reduce from 28% to 20% for higher rate tax payers and from 18% to 10% for basic rate tax payers. However, there will be an additional 8% charge on gains from a residential property.