Personal Taxation

Basic Personal Allowance and Transferable Allowance for 2015/16

The personal allowance for those born after 5 April 1938 will be £10,600 for 2015/16. As a corollary, the transferable allowance for married couples and civil partners (10% of the personal allowance) will be £1,060. The higher rate threshold (i.e. the aggregate of the personal allowance and the basic rate limit) will be £42,385.

Personal Allowance and Basic Rate Limit for 2016/17 and 2017/18

The personal allowance will be £10,800 and £11,000 for 2016/17 and 2017/18 respectively. As a consequence there will no longer be a separate age-related allowance for 2016/17 onwards. The basic rate limit will be £31,900 for 2016/17 and £32,300 for 2017/18. The combined effect is that the higher rate threshold will be £42,700 in 2016/17 and £43,300 in 2017/18.

Charge for using Remittance Basis

An individual not domiciled in the UK who chooses to be taxed on the remittance basis on overseas income and chargeable gains must pay a special additional tax charge. This is currently £30,000 if the individual has been UK resident in at least 7 of the 9 preceding tax years or £50,000 if he has been UK resident in at least 12 of the 14 preceding years. For 2015/16 onwards the £50,000 charge is to increase to £60,000. The £30,000 charge will remain unchanged. The additional charge will be increased to a new level of £90,000 if the individual has been UK resident in at least 17 of the 20 preceding tax years.

Exemption from Income Tax for the Bereavement Support Payment

With effect from a date to be announced, the bereavement support payment (BSP) will replace the current bereavement allowance, bereavement payment and widowed parent’s allowance for bereaved people who lose their spouse or civil partner. Once in payment, BSP will be exempt from income tax.

Miscellaneous Loss Relief for Income Tax

Anti-avoidance legislation will deny a person miscellaneous loss relief for income tax purposes where a loss arises as a result of tax avoidance arrangements. The legislation will also deny miscellaneous loss relief against miscellaneous income that arises as a result of tax avoidance arrangements. This is effective for losses and income arising on and after 3 December 2014.

In addition, for 2015/16 onwards, the offset of a miscellaneous loss will be limited to miscellaneous income that is chargeable to income tax under, or by virtue of, the same provision as that under which the loss would have been chargeable had it been profits or other income instead of a loss.

Bad Debt Relief on Peer-to-peer Lending

Individuals who make loans through peer-to-peer (P2P) platforms will be able to offset bad debts arising against the interest they receive from P2P loans when calculating their taxable income. These changes will have effect for loans made from 6 April 2015, but the legislation will be in a future Finance Bill.