April 6 – the start of the 2016-2017 tax year is a big day for tax with a number of new measures covering pensions and earnings affecting landlords taking effect.
Now’s the time to check out your finances in readiness for the day – and to make sure you do not lose out, here’s a list of the changes:
- Landlords renting out furnished homes lose the 10% wear and tear allowance. The allowance is replaced with a new wear and tear or replacement allowance for all landlords.
The 3% stamp duty surcharge also comes into force for buy to let or second homes worth more than £40,000 in England and Wales
- Rent A Room Relief for householders taking in a lodger rise from £4,250 to £7,500 a year
- The basic and additional state pensions are replaced by the flat rate pension paying £155 a week to all qualifying pensioners. To receive the full payment, the qualifying rules have changed – from 30 years of full working to 35 years
- The annual allowance for pension contributions tapers from £40,000 to £10,000 on tax relief depending on annual earnings. Those earning the highest- more than £150,000 a year – gain the least
- The lifetime allowance for retirement savings drops from £1.25 million to £1 million. Retirement savers already exceeding the cap can apply for protection – those that do not make the application will pay fines if their pension funds grow above the lifetime allowance limit
- Tax rates on taxable lump sums paid by Qualifying Recognised Overseas Pension Schemes (QROPS) as death benefits are slashed from 45% to the recipient’s marginal rate
- The Scottish rate of income tax comes into force
- The personal savings allowance is introduced
- The dividend tax allowance is introduced
This is not an exhaustive list of tax changes for April 2016 – and the date those that affect companies take affect is from April 1.