1. How it works
Marriage Allowance lets you transfer £1,060 of your Personal Allowance to your husband, wife or civil partner.
This reduces their tax by up to £212 in the tax year.
To benefit as a couple, you – as the lower earner – need to have an income of £10,600 or less.
You can’t transfer more or less than £1,060.
Who can apply
You can get Marriage Allowance if your partner’s income is between £10,601 and £42,385.
If you or your partner were born before 6 April 1935, you might benefit more as a couple by applying for Married Couple’s Allowance instead.
If you live outside the UK
If you or your partner live abroad, you can get Marriage Allowance as long as you get a Personal Allowance.
From April 2016 the Dividend Tax Credit will be replaced by a new tax-free Dividend Allowance.
The Dividend Allowance means that you won’t have to pay tax on the first £5,000 of your dividend income, no matter what non-dividend income you have.
The allowance is available to anyone who has dividend income.
Headline rates of dividend tax are also changing.
You’ll pay tax on any dividends you receive over £5,000 at the following rates:
•7.5% on dividend income within the basic rate band
•32.5% on dividend income within the higher rate band
•38.1% on dividend income within the additional rate band
This simpler system will mean that only those with significant dividend income will pay more tax.
If you’re an investor with modest income from shares, you’ll see either a tax cut or no change in the amount of tax you owe.
Dividends received by pension funds that are currently exempt from tax, and dividends received on shares held in an Individual Savings Account (ISA), will continue to be tax free.
From April 2016 you have to apply the new headline rates on the amount of dividends you actually receive, where the income is over £5,000 (excluding any dividend income paid within an ISA).
The Dividend Allowance will not reduce your total income for tax purposes. However, it will mean that you don’t have any tax to pay on the first £5,000 of dividend income you receive.
Dividends within your allowance will still count towards your basic or higher rate bands, and may therefore affect the rate of tax that you pay on dividends you receive in excess of the £5,000 allowance.
You have until 11:59pm on 31 January to send a completed online self-assessment tax return for the 2014/15 tax year, which ended 5 April 2015, to HMRC. If you miss the deadline you’ll be fined £100. This applies even if you don’t owe any tax or are due a refund.
If you are a first-time buyer, the Government will give you a cash boost towards buying your first home if you save into a new type of ISA.
The Help to Buy: ISA will be available through banks and building societies. It is designed to reward people that are working hard to save up for their first home. First time buyers that choose to save through a Help to Buy: ISA will receive a government bonus to help them make the critical first step on the housing ladder. The bonus will represent 25% of the amount saved so, for the maximum monthly saving of £200, the government will contribute £50, with a maximum government contribution of £3,000 on £12,000 of savings. The bonus will be calculated and paid when you buy your first home. For basic rate taxpayers, this will be equivalent to saving completely free of tax for their first home. Accounts are limited to one per person rather than one per home so those buying together can both receive a bonus.
The operational details will be finalised following discussions with industry. The government’s aim is to provide a scheme that offers a tax-free government bonus to help people who are saving up to buy a first home worth up to £450,000 in London or £250,000 anywhere else in the UK. Accounts can be opened for a period of 4 years from the start date of the scheme.
Source: HM Treasury
WARNING: You can’t contribute to cash ISA and a Help to Buy ISA in the same tax year. This means that if you open a new cash ISA after 6 April 2015 (or put money in an existing one, which technically is opening a new one) you will NOT be able to open a Help to Buy ISA when they launch in December – instead you’ll have to wait until the next tax year.