{"id":480,"date":"2016-03-16T16:52:19","date_gmt":"2016-03-16T16:52:19","guid":{"rendered":"http:\/\/www.wealthatwork.co.uk\/jpm\/2016\/03\/16\/budget-commentary-2016\/"},"modified":"2016-03-16T16:52:46","modified_gmt":"2016-03-16T16:52:46","slug":"budget-commentary-2016","status":"publish","type":"post","link":"https:\/\/www2.wealthatwork.co.uk\/jpm\/2016\/03\/16\/budget-commentary-2016\/","title":{"rendered":"Budget Commentary 2016"},"content":{"rendered":"

\"budget<\/a><\/p>\n

 <\/p>\n

The Chancellor of the Exchequer, George Osborne, has today delivered this year\u2019s Budget Report.<\/strong><\/p>\n

There was much media hype ahead of the annual Budget Report over plans to drastically change the pension tax relief system. The proposals were abandoned after a report from a Government source that \u2018now isn\u2019t the right time, with uncertainty in the global economy and reforms such as auto-enrolment still bedding in, to turn things on their head.\u201d<\/p>\n

See below for our Budget Commentary;<\/p>\n

Personal allowances<\/strong>
\nIncome tax personal allowance will increase from \u00a311,000 in 2016\/17 to \u00a311,500 from 6 April 2017.\u00a0 \u00a0The higher rate threshold will increase from \u00a343,300 in 2016\/17 to \u00a345,000 again from April 2017.\u00a0 The Government is still committed to having a tax free allowance of \u00a312,500 and a \u00a350,000 higher rate tax threshold by the end of this Parliament.<\/p>\n

Capital Gains tax<\/strong><\/p>\n

Somewhat surprisingly, the Chancellor has announced a reduction in the rates of tax paid on capital gains.\u00a0 For disposals made after 6 April 2016 the higher rate of Capital Gains Tax (CGT) will reduce from 28% to 20% and the basic rate from 18% to 10%. It should be noted that these reductions will not apply to chargeable gains made on residential properties, for example second homes.\u00a0 The CGT exemption for 2016\/17 remains at \u00a311,100.<\/p>\n

Jonathan Watts-Lay, Director, WEALTH at work comments; “These cuts will really make a difference. For example, those with gains from Save as Your Earn schemes could now have a lower tax bill. Capital gains rates are now typically half of what income tax would be \u2013 a great win for savers!\u201d<\/p>\n

Pension Tax Relief<\/strong><\/p>\n

 <\/p>\n

The Chancellor confirmed that there was no consensus on changes to the pension tax system. However he did confirm that the tax free cash sum would remain. It is likely that changes to the pension tax system will be announced at a later date.<\/p>\n

 <\/p>\n

Lifetime ISA<\/strong><\/p>\n

\u00a0<\/strong><\/p>\n

Perhaps as a precursor to the much rumoured Pension ISA, the Chancellor announced the introduction of a new Lifetime ISA from April 2017.\u00a0 This ISA will be available for savers between the ages of 18 and 40 and savers would be able to save up to \u00a34,000 per year and receive a Government bonus of up to \u00a31,000 (i.e. 25%).\u00a0 Any savings put into the ISA before your 50th<\/sup> birthday will be eligible for the bonus.<\/p>\n

\u00a0<\/strong><\/p>\n

The money could be withdrawn tax free from age 60, or when applied to purchase a first home of up to \u00a3450,000, if earlier. Alternatively, it could be withdrawn for any other purpose, but it would then not benefit from the Government bonus with loss of interest on that amount and a 5% charge would apply.<\/p>\n

Jonathan Watts-Lay, Director WEALTH at work comments; \u201cThis is great news for young savers as this is effectively giving them a 25% interest rate on their savings whilst giving them flexibility and access. They no longer have to choose between saving for their first home, or retirement. I’ll be encouraging all young people to use it, including my children. If a 25% interest rate can’t get young people saving then I’m not sure what will.”<\/p>\n

ISA<\/strong><\/p>\n

 <\/p>\n

The overall ISA limit will be raised from the current \u00a315,240 to \u00a320,000 from 6 April 2017.\u00a0 This limit would include savings in the Lifetime ISA and Help to Save ISA.<\/p>\n ","protected":false},"excerpt":{"rendered":"

The Chancellor of the Exchequer, George Osborne, has today delivered this year\u2019s Budget Report.<\/p>\n","protected":false},"author":1,"featured_media":483,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4,5],"tags":[],"_links":{"self":[{"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts\/480"}],"collection":[{"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/comments?post=480"}],"version-history":[{"count":1,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts\/480\/revisions"}],"predecessor-version":[{"id":482,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts\/480\/revisions\/482"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/media\/483"}],"wp:attachment":[{"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/media?parent=480"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/categories?post=480"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/tags?post=480"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}