Mixed Budget News

Archi_Bald

talexuser wrote: »

However even more confusingly, next year you can apparently have a 2k savings limit if still below the limit for that year only.

Have you got the words from the Budget document for this?

Archi_Bald

redux wrote: »

MSE has already published then hidden an article about dividends (see currently adjacent discussion thread).

It's may be because they remembered that dividends are about investments, whilst MSE is about savings? Or may be they are just reworking the article as it was quite inaccurate.

talexuser

Archi_Bald wrote: »

Have you got the words from the Budget document for this?

No, but it's about 1/3 way down here
http://www.moneysavingexpert.com/savings/tax-free-savings

gadgetmind

Well, it looks like I can stash a little more in a pension this year, and save about £4k tax doing it, but it all then goes massively downhill in subsequent years. TBH the best thing I can do is reduce my hours as lets me put more (yes!) into my pension and avoids silly tax rates.

Archi_Bald

talexuser wrote: »

No, but it's about 1/3 way down here
http://www.moneysavingexpert.com/savings/tax-free-savings

Hmh. First I heard of that, and tbh, I don't understand what the words mean - do you? What are "these tax-free rules" and what are the qualification criteria?

Then, from next April, the personal savings allowance will supersede these tax-free savings rules, BUT anyone who still qualifies then under these tax-free savings rules will get a higher £2,000 personal savings allowance for that year, instead of the £1,000 that will apply for other basic-rate taxpayers.

Archi_Bald

gadgetmind wrote: »

Well, it looks like I can stash a little more in a pension this year, and save about £4k tax doing it, but it all then goes massively downhill in subsequent years. TBH the best thing I can do is reduce my hours as lets me put more (yes!) into my pension and avoids silly tax rates.

Mind that Lifetime Allowance.

2.82 Lifetime Allowance for pension contributions – The government will reduce the Lifetime Allowance for pension contributions from £1.25 million to £1 million from 6 April 2016. Transitional protection for pension rights already over £1 million will be introduced alongside this reduction to ensure the change is not retrospective. The Lifetime Allowance will be indexed annually in line with CPI from 6 April 2018. (Finance Bill 2016)

gadgetmind

Assuming I can still crystalise in early 2018 at age 55, I should be *just* OK regards LTA as long as markets don't soar from here, which doesn't feel too likely to me.

kidmugsy

gadgetmind wrote: »

TBH the best thing I can do is reduce my hours as lets me put more (yes!) into my pension and avoids silly tax rates.

Just one of the costs to the country of running an extravagantly expensive welfare state, and raising the taxes to pay for it.

Nocto

Being pragmatic, if I’m asked to pay 7.5% tax on some of my unearned income to help get the countries finances back in order, I’m not going to complain. I just hope they don’t waste my money… (Yes I know - there’s more chance of flying pigs!:rotfl:)

I suspect that the outgoing system was too good to last. Income up to about £38,000 essentially tax free if it’s all paid in the form of dividends, is quite generous!

I just need to know exactly how the new system works so that I can budget accordingly.

talexuser

Archi_Bald wrote: »

Hmh. First I heard of that, and tbh, I don't understand what the words mean - do you? What are "these tax-free rules" and what are the qualification criteria?

My guess is an income less than the personal allowance?
Or an income+interest of less than personal allowance plus 2K?
I haven't seen it elsewhere either.

Seems quite a loss to lose the 5k allowance and get just 1k eventually instead for those in that position.