rom April this year, the notional 10% tax credit on dividends has been abolished and replaced by a new tax-free Dividend Allowance. The Dividend Allowance means that you won’t have to pay tax on the first £5,000 of your dividend income, no matter what non-dividend income you have.
Should you review your situation with further changes on the horizon?
Inheritance Tax (IHT) affects not just the very rich – other people may be liable without realising it. Few taxes are quite as emotive – or as politicised – as IHT.
The Chancellor of the Exchequer, George Osborne, delivered his eighth Budget speech on Wednesday 16 March, his third in 12 months. Now that we’ve had time to take stock of the key announcements, we consider how they could impact your finances both today and in future years.
With an increasing focus on ‘Brexit’, our investment clients will naturally be monitoring the impact on financial markets ahead of the referendum scheduled for Thursday 23 June.
The introduction of the new Lifetime Individual Savings Account (LISA) next year is aimed at helping young people save flexibly for the long term throughout their lives, and simultaneously enabling them to save for a first home and for their retirement without having to choose one over the other.
A shake-up of the stamp duty rules took effect on 1 April 2016 in relation to anyone owning more than one residential property – this will affect those buyers funding the purchase of a new home with the sale of an existing home: if their buyer pulls out but they still want to go ahead – perhaps by using a bridging loan – they will be liable for the stamp duty surcharge because they will technically own two residential properties at completion.
More choice and flexibility than ever before
Following changes introduced in April 2015, you now have more choice and flexibility than ever before over how and when you can take money from your pension pot, but it’s essential to obtain professional advice to decide what the best course of action you should take, as this will be your retirement income for the rest of your life.
A self-invested personal pension (SIPP) is a pension ‘wrapper’ that holds investments until you retire and start to draw a retirement income. It is a type of personal pension and works in a similar way to a standard personal pension. The main difference is that with a SIPP, you have greater flexibility with the investments you can choose.
Saving tax-efficiently for retirement
A personal pension is a type of defined contribution pension. You choose the provider and make arrangements for your contributions to be paid. If you haven’t got a workplace pension, getting a personal pension could be a good way of saving for retirement.
Secure income for life
A defined benefit pension scheme is one where the amount paid to you is set using a formula based on how many years you’ve worked for your employer and the salary you’ve earned rather than the value of your investments. If you work or have worked for a large employer or in the public sector, you may have a defined benefit pension.