Whilst much of the media attention will inevitably be on plans for spending cuts, this budget may also bring with it an overhaul of the tax system. Here is a summary of the rumoured changes and what it might mean for doctors.
- The additional rate of income tax of 45% for earners over £150,000 maybe abolished. This will of interest to any doctors earning over £150,000 and will represent an income tax saving.
- A further tightening of the rules surrounding 'non-domiciled' status. Perhaps of interest to doctors who have come here to work from overseas.
- A new main residence IHT nil rate allowance of £175,000 is proposed. This will help doctors who have significant assets which include the family home and have been worried about potential inheritance tax.
- A reduction in the Annual Allowance for pensions by £1 for every £2 of income over £150,000 and a proposal for a reduction in the Lifetime Allowance to £1m in 2016-17. This should be of great interest to any doctors who have significant NHS Pensions as well as personal pensions.
- Removal of mortgage interest relief on buy to let properties.
- Capital gains tax rates to be aligned with income tax rates.
- A cap on the qualifying principal private resident gains.
Remember these are just potential changes at the moment. Be sure to revisit our news items when the budget is announced and to see how it may affect you. Please do not hesitate to get in touch to review your financial plans on firstname.lastname@example.org or 0117 966 5699.