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New tax rates and allowances for the 2014/15 tax year

We believe it makes good sense to make the most of your ISA and Pension allowances as early as possible each tax year to maximise both the potential for investment gains, and the length of time your money is sheltered from the taxman.

Lee Dooley
08 April 2014

So at the start of this tax year, here is a reminder of some of the new tax rates and allowances for the coming year:

Individual Savings Accounts (ISAs)

       

6 April 2014 - 30 June 2014

   

Increasing on
1 July by:

 

1 July 2014 -
5 April 2015

 

ISA allowance

 

 

£11,880

 

 

£3,120

to

£15,000

 

Comprising - cash up to

 

 

£5,940

 

 

£9,060

to

£15,000

 

Comprising - balance in
stocks and shares

 

 

£11,880

 

 

£3,120

to

£15,000

You can shelter £11,880 into your ISA allowance now and top this up to £15,000 from 1 July.

Junior Individual Savings Accounts (JISAs)

 

6 April 2014 – 30 June 2014

Increasing on     1 July by:

 

1 July 2014 –       5 April 2015

 
 

JISA allowance

£3,840

£160

to

£4,000

 

 

Pensions

 

2014/15

2013/14

Annual Allowance

£40,000

£50,000

Lifetime Allowance

£1,250,000

£1,500,000

For the 2014/15 tax year, you can pay into a pension a gross amount equal to your income, up to a maximum of £40,000. If you have contributed less than £50,000 gross in any of the previous three tax years, you can use carry forward rules to make an additional payment into your pension this year.

Other notable rule changes for this tax year include a reduction in the annual income required in order to enter ‘flexible drawdown’ from £20,000 to £12,000, whilst the maximum you can take from ‘capped drawdown’ has increased by 25%.

These are just a few of many changes announced in last month’s budget. You can view further information on pension rules and the Best SIPP and if you would like to discuss the changes in greater detail, our pensions experts are available on 020 7189 2400.

Income Tax Rates

2014/15

2013/14

Band (£)

Rate (%)

Band (£)

Rate (%)

Nil -2,880* (Savings rate)

10

Nil -2,790 (Savings rate)

10

Nil -31,865 (Basic)

20

Nil -32,010 (Basic)

20

31,866 – 150,000 (Higher)

40

32,011 – 150,000 (Higher)

40

Over 150,000 (Additional)

45

Over 150,000 (Additional)

45

The rates applicable for dividends are: 10% basic rate, 32.5% higher rate, 37.5% additional.

*Only applicable to dividends and savings income. The 10% rate is not available if taxable non-savings income exceeds £2,880.

The personal allowance for under-65s has increased from £9,440 to £10,000. The personal allowance for 65-74 year olds and those aged over 75 have been frozen at £10,500 and £10,660 respectively. There have also been increases to the married couples allowance and the age allowance income limit.

Capital Gains Tax - Individuals

 

2014/15

2013/14

Exemption

£11,000

£10,900

Standard Rate

18%

18%

Higher Rate*

28%

28%

* For Higher & Additional rate tax payers

Have you seen our online tools and calculators?

We have a range of useful online tools and calculators to help you manage your personal finances. The pension planning tool in particular provides a very useful guide to how much you need to be saving now in order to achieve the lifestyle you want in retirement.

Topics

The value of investments can go down as well as up, and you may get back less than you originally invested.

SIPPs are not suitable for everyone. If you don’t want to invest across different asset classes or don’t think you will make use of the investment choices that SIPPs give you then a SIPP might not be right for you. Self-directed investors should regularly review their SIPP portfolio, or seek professional advice, to ensure that the underlying investments remain in line with their pension objectives. Prevailing tax rates and the availability of tax reliefs are dependent on your individual circumstances and are subject to change.