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saver

If you or your partner

have low earnings or

pension income,

you could

benefit from the 0% tax

rate on up to £5,000 of

savings income in 2015/16.

£

BUDGET

8 JULY 2015

Residential landlords – reform of the wear and tear

allowance

The wear and tear allowance will be replaced from April 2016

with a new relief that allows all residential landlords to deduct

the actual costs of replacing furnishings. Capital allowances will

continue to apply for landlords of furnished holiday lets.

Residential landlords – restricting finance cost relief

The relief on finance costs (e.g. interest) that individual landlords

of residential property can receive will be limited to the basic rate

of tax. The restriction will be phased in over four years, starting

from April 2017.

Rent-a-room relief

From 6 April 2016 the level of rent-a-room relief will be increased

from £4,250 to £7,500 a year.

PENSIONS AND SAVINGS

Personal savings allowance

From 6 April 2016 an allowance will be introduced to remove

tax on up to £1,000 of savings income for basic rate taxpayers

and up to £500 for higher rate taxpayers, as announced in the

March Budget 2015. Additional rate taxpayers will not receive an

allowance. Automatic deduction of 20% income tax by banks and

building societies on non-ISA savings will cease from the same

date.

Pensions – reduced lifetime allowance

From 6 April 2016 the lifetime allowance for pensions will

be reduced from £1.25 million to £1 million, as previously

announced. Transitional protection for pension rights that are

already over £1 million will be introduced to ensure this change is

not retrospective. The lifetime allowance will be indexed annually

in line with the consumer prices index (CPI) from 6 April 2018.

Pensions – reduced annual allowance

From April 2016 a tapered reduction in the amount of the

annual allowance will be introduced for individuals with

income (including the value of any pension contributions) of

over £150,000 and who have an income (excluding pension

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