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The 2014 Budget has now been announced, and there are a number of areas such as pensions, savings and property ownership which contain interesting changes that may affect individuals.
For those hoping to save more, the 2014 Budget will assist you. Tax free saving using ISAs is being aided, as the overall annual subscription limit for ISAs will be increased to £15,000 from 1 July 2014, and this full amount can be held in either cash, stocks and shares, or any combination of the two. Individuals will be permitted to transfer any funds previously invested in stocks and shares into cash outside of annual subscription limits.
The Premium Bond limit will also be increased from £30,000 to £40,000 in June 2014 and £50,000 in 2015 and the number of million pound winners per month will be doubled.
Big changes to rules on saving for retirement were also announced, allowing people far more freedom to choose what they do with their pension pots. These changes mean that individuals will no longer be forced to buy an annuity at retirement, and will instead have the freedom to take savings built up in a defined contribution pension as a cash lump sum, taxed at their marginal rate of tax. All individuals with a defined contribution pension pot will be offered free and impartial face-to-face advice at the point of retirement. It is not yet clear how these new rules will impact on pension sharing in the event of separation or divorce, so you should seek legal advice if this is something you think might be relevant to you.
In terms of property ownership, where property is owned by a company, Stamp Duty Land Tax of 15% will be payable where the property is worth over £500,000. Further, residential properties owned by a company which are worth between £1 million and £2 million will be subject to an annual tax of £7,000. This will be extended to include residential properties owned by companies which are worth between £500,000 and £1million in 2016.
If you would like further information on how the changes announced by the Budget may impact you, please contact us.