Personal Finance Changes: Whats Coming 2016/2017
LTA cut to £1M
The pension lifetime allowance is to be cut from £1.25M to £1M with new protection options for those expecting to be caught.
AA cut for higher earners
The standard £40k annual allowance will be reduced by £1 for every £2 of ‘income’ you have over £150k in a tax year, until allowance drops to £10k.
£5k Dividend Allowance
A new allowance will see the first £5k of dividends paid tax free. The changes also mean new rates of tax for dividends in excess of the allowance and an end to the notional 10% tax credit.
Personal Savings Allowance
Also from April 2016 the first £1k of interest will be tax free (£500 for higher rate taxpayers). Interest will also be paid gross so that non-taxpayers no longer have to reclaim tax deducted at source. Additional rate tax payers will not benefit from this new allowance.