Please see HMRC Website to download the 2015 Budget documents and our summary below of the key announcements made.

• A new “family home allowance” will be introduced when a family home is passed on death to direct descendants. This will be £100,000 in 2017/18, £125,000 in 2018/19, £150,000 in 2019/20 and £175,000 in 2020/21 subject to a tapered withdrawal of the allowance for estates with a net value of more than £2 million. This will effectively increase the IHT threshold from £325,000 per person to £500,000 with effect from 6 April 2020 for estates worth less than £2m. This means that married couples will be able to pass on assets worth up to £1m, including a family home, without paying any IHT at all. The new allowance will also be available when a person downsizes or ceases to own a home on or after 9 July 2015 and assets of an equivalent value, up to the value of the new allowance, are passed on death to direct descendants (subject to a technical consultation).

• There will be major changes to dividend taxes from April 2016 with dividend tax credits now being replaced by a new tax free dividend allowance of £5,000. The new rates of tax on dividend income will be 7.5% for basic rate taxpayers, 32.5% for higher rate taxpayers and 38.1% for additional rate taxpayers. Dividends paid within pensions and ISAs will remain tax free and are unaffected by these changes.

• Mortgage interest tax relief for buy-to-let landlords will be restricted to the basic rate of tax. This will be phased in over 4 years starting from April 2017. In addition, from April 2016, the “wear and tear allowance”, which allows landlords to claim relief to reduce the tax they pay (regardless of whether they replace furnishings in their property) will also be replaced by a new system that only allows them to get tax relief when they actually replace furnishings.

• Those earning more than £150,000 will have the amount they can invest in a pension each year on which they can get tax relief reduced from £40,000 to £10,000.

• Tax free personal allowance to be raised to £11,000 for 2016/17 and £11,200 for 2017/18.

• Higher rate threshold to rise to £43,000 for 2016/17 and to £43,600 for 2017/18.

• From April 2017, individuals who are born in the UK to parents domiciled in the UK will not be able to claim non-domicile status whilst they are resident in the UK. In addition, individuals will not be able to have permanent non-domicile status. From April 2017, anyone resident in the UK for more than 15 of the last 20 tax years will be deemed domiciled in the UK for all tax purposes (subject to technical consultation). 
  
• IHT will be payable on all UK residential property owned by non-domiciles, regardless of their residence status for tax purposes, including property held indirectly through foreign companies or other opaque structures (subject to technical consultation). 
  
• The Government will provided additional resource to HMRC to tackle tax evasion and other non-compliance among wealthy individuals by extending HMRC’s Customer Relationship Model to individuals with net wealth between £10-20 million, and to pursue more criminal investigations against wealthy individuals evading tax. 
  
• The government will invest an additional £36 million over five years from 2016 to tackle serious non-compliance by trusts, pension schemes and non-domiciled individuals. 

• Corporation tax to be cut to 19% for the financial year beginning 1 April 2017 with a further reduction from 19% to 18% for the financial year beginning 1 April 2020.