Easter bunnies, chocolate eggs … and a whole host of personal finance goodies
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Version 0 of 1. Over a 48-hour period over the bank holiday weekend the world will change. Well, not quite. But there are a lot of things that start or change on Sunday and Monday, such as increased flexibility for working parents, money for married couples, and new rules for pension holders over 55. Here’s what you need to know. What’s happening on Sunday … Shared parental leave Working parents can apply to share maternity leave from 5 April 2015 under new rules aimed at offering greater flexibility in how they care for their children in their first year. Parents will be allowed to split up to 50 weeks off work after having a baby or adopting. Mothers will take the first two weeks – the compulsory part of maternity leave. However, it will be possible to transfer the remaining maternity leave to the father or, in theory, share it. This right will only be available to couples if both work, which critics say rules out many parents. What’s happening on Monday … Marriage tax allowance From Monday couples can claim the new marriage tax allowance – a Conservative policy which will allow some couples to share part of their annual income tax allowance. It only applies to couples where one earns less than £10,600 a year and the other earns less than £42,385. For some couples it will be worth as much as £212 a year. Pension freedom day As of Monday, anyone over the age of 55 with a defined contribution (stock market-linked) pension can take all of their money out of it if they wish, and will no longer be herded into buying an annuity. There are big tax – and other – implications for people to consider before they take the money out. Nevertheless, billions of pounds are expected to be withdrawn within the next few months alone. Pension providers are gearing up for a massive surge in enquiries, but your firm may not be open on bank holiday Monday. The Guardian and Observer will be providing more coverage of pensions on Saturday and Sunday and in the months ahead. Bookmark this page. A new personal allowance The personal allowance is the amount anyone can earn without having to pay income tax. It will rise from £10,000 to £10,600 on Monday. The starting point at which people will pay higher-rate tax will also increase to £42,385 (£31,785 after personal allowance). Those with incomes above £100,000 will lose the personal allowance at the rate of £1 for each additional £2 they receive. You can check your taxable income on the government’s website. Changes to Isas and child trust funds The amount you can put into an Isa tax-free will increase on Monday from £15,000 to £15,240. The amount you can pay into a Junior Isa will increase from £4,000 to £4,080. One key change for parents of young children is that from Monday you will be allowed to transfer your child’s CTF into a Junior Isa if you wish. Tax-free CTFs were launched 10 years ago as a way of encouraging parents to save for their children. They were replaced by Junior Isas in 2011, but only children born on or after 3 January 2011, or before 1 September 2002, are eligible for those. More than 6 million children born outside these dates have been stuck with CTFs – until Monday when the rules change. A crackdown on nuisance calls Changes to the law will make it easier for firms which plague consumers with nuisance calls and texts to be hit with much bigger fines of up to £500,000. The law currently requires the Information Commissioners Office to prove that a company caused “substantial damage or substantial distress” by their conduct before action can be taken. But this legal threshold has been removed through changes which will come into effect on Monday. Tax changes for those who live abroad but have homes here At present, non-residents are not generally subject to capital gains tax. From Monday all non-UK residents will be subject to CGT on the money they make on selling a UK residential property. This is a major change to the UK tax system and brings non-resident buyers in to line with UK buyers. “This new tax could prove to be a deterrent, perhaps intentional, for high-net worths who may be considering a new or additional house purchase in the UK,” says Lucy Brennan, partner at accountancy firm Saffery Champness. “It will be interesting to see what the impact might be, and whether some individuals now choose to put their money elsewhere.” |