The Budget 2016 Highlights
The Budget 2016 was delivered by Chancellor George Osborne on Wednesday 16 March. The focus this year was on the ‘next generation’ of savers and there is some good news for investors. Many of the headline-grabbing measures will come into effect from the next and subsequent tax years. Here’s a summary of the highlights confirmed by the Chancellor:
- The launch of a new Lifetime ISA from April 2017 for adults under the age of 40, with a maximum contribution of £4,000 a year and a 25% bonus. The standard ISA investment limit will rise to £20,000 at the same time.
- A cut in the main rates of capital gains tax from 2016/17 to 20% for higher and additional rate taxpayers and 10% for other taxpayers. However, the existing rates will continue for gains on residential property and carried interests.
- An increase in the personal allowance for 2017/18 to £11,500 and the higher rate threshold to £45,000.
- An extension of entrepreneurs’ relief to cover long term external investors in unlisted companies.
- Two new £1,000 tax allowances for property income and trading income, starting in April 2017.
- A cut in the corporation tax rate to 17% in 2020 and greater flexibility in the use of tax losses by smaller companies.
- A restructuring of stamp duty land tax on commercial properties.
- A major revamp of business rates, permanently doubling the small business rate relief.
- The abolition of Class 2 National Insurance contributions for the self-employed from 6 April 2018.