Help to Buy: ISA
The scheme will provide a government bonus to each person who has saved into a Help to Buy: ISA at the point they use their savings to purchase their first home. For every £200 a first time buyer saves, the government will provide a £50 bonus up to a maximum of £3,000 on £12,000 of savings. Further details are provided in the document ‘Help to Buy: ISA’ which is published alongside the Budget.
- new accounts will be available for four years
- accounts will be available through banks and building societies from Autumn 2015
- an initial deposit of £1,000 can be made in addition to normal monthly savings
- the maximum monthly savings is £200 with no minimum deposit
- accounts are limited to one per person, rather than one per property
- only available to individuals over 16 years of age
- the bonus is available to first time buyers purchasing UK properties
- minimum bonus size of £400 per person
- maximum bonus size of £3,000 per person
- bonus available on homes purchased of up to £450,000 in London and up to £250,000 outside London
- bonus will be paid when the home is purchased
Extending ISA eligibility
The list of qualifying investments for ISAs will be extended to include listed bonds issued by a co-operative and community benefit society and small and medium sized enterprise (SME) securities (not just equities) admitted to trading on a recognised stock exchange from summer 2015.
The government will explore further extending the list to include debt (as announced at Autumn Statement 2014) and equity securities offered via crowdfunding platforms and will consult in summer 2015 alongside a response to the consultation on how to include peer-to-peer loans.
A new personal savings allowance
The government will introduce an allowance from 6 April 2016 to remove tax on up to £1,000 of savings income for basic rate taxpayers and up to £500 for higher rate taxpayers. Additional rate taxpayers will not receive an allowance. As part of these reforms, HMRC will introduce automated coding out of savings income that remains taxable through the Pay As You Earn system from 2017-18, with pilots starting in autumn 2015.
Making ISAs more flexible
Individuals will be able to withdraw and replace money from their cash ISA in-year without it counting towards their annual ISA subscription limit, and the government will change the rules in autumn 2015 following technical consultation with ISA providers.
65+ bond extension
The extension of the availability of 65+ bonds through National Savings and Investments (NS&I) until 15 May 2015 is estimated to generate £3.2 billion of additional sales.
Bad debt relief on investments made through the Peer-to-Peer (P2P) lending industry
As previously announced at Autumn Statement 2014, the government will introduce a new relief to allow individuals lending through P2P to offset any losses from loans which go bad against other P2P income. It will be effective from April 2016 and through self assessment will allow individuals to make a claim for relief on losses incurred from April 2015.
Premium Bond investment limit
The planned increase to the NS&I Premium Bond investment limit to £50,000 will take place on 1 June 2015, providing further support for savers.
Article by ACCA In Practice