April marks the start of the new tax year, which brings a variety of changes to tax, pensions and ISAs. To help you make the most of your finances in 2015/16, we have outlined some of the changes that will affect you below:
- Personal allowance – The amount that individuals can earn before paying income tax has risen from £10,000 to £10,600 for 2015/16. The allowance for those who were born between 6 April 1938 and 5 April 1948 has increased by £100 and will match the £10,600 limit. However, the allowance continues to remain frozen at £10,660 for individuals born before 6 April 1938.
- ISA limit – The maximum you can save in either a cash or stocks and shares ISA has risen to £15,240. This tax-free allowance can be use in one account or spread across both. For example, you can save £10,240 in a cash ISA and £5000 in a stocks and shares ISA in the tax year.
- State pensions – The guaranteed set weekly income for those of state pension age has increased from £113.10 to £115.95.
- Inheritance Tax – The IHT limit for the 2015/16 tax year remains frozen at £325,000.
- Pension contributions – The annual allowance will remain unchanged at £40,000. The lifetime allowance is also still frozen at £1.25 million for this tax year.
- Capital Gains – The tax-free amount on total gains has risen from £11,000 to £11,100. If the total gain from the sale of assets, including shares or second properties exceeds the £11,100 allowance, the excess will be liable for Capital Gains Tax.