News Archive - December 2014
Autumn Statement 2014
15/12/2014
There were more giveaways for savers in the Autumn Statement.
The ISA allowance will rise from £15,000 to £15,240 per person per annum from April 2015.
One unexpected change is that it will now be possible to effectively inherit an ISA from a spouse without losing the ISA’s tax-favoured status. This is great news for those who rely on income from their ISAs in retirement. Previously, the investment held with the ISA would be moved outside an ISA wrapper on death, meaning that any income from the investments would be potentially liable to Income Tax.
The above changes do not change the Inheritance Tax situation.
The planned changes to pension death benefits were also confirmed.
If you die before age 75, the future benefits paid out from your pension or annuity will be tax-free. This includes lump sum death benefits from unvested pensions, withdrawals from Income Drawdown policies, and also payments of guaranteed periods or spouse’s or dependent’s pensions under existing annuity policies.
If you die after age 75, any future payments out of a pension will be added to the recipient’s other income and Income Tax applied accordingly in the year they are received.
It will also be possible to pass on a pension pot to any named beneficiary rather than just to a spouse. The rule change means that people need not worry about a remaining pension pot being eaten up by excessive tax charges on death.
I think that this will provide a much greater incentive for people to save into pensions, as well as making Income Drawdown a much more attractive proposition.
However, each person is different and professional advice is a must. Call Mulberry Financial in Macclesfield if you want to talk about the new options.
The material here is for general information only and is not intended to be relied upon for individual investment decisions. Appropriate independent advice should be obtained before making any such decisions. Mulberry Financial Ltd does not accept any liability for any loss suffered by any user as a result of any such decision.
The information is based on our understanding of current HMRC rules and practices (as at the news article date) which are always subject to change. Taxation and trust advice and Cash ISAs are not regulated by the Financial Conduct Authority. This site is aimed at UK residents only.
Please remember that the prices of shares and other investments can fall sharply. You may not get back the money you originally invested. Past performance is not necessarily a guide to the future.
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