Welcome to ALTYX  FINANCIAL PLANNING’s  1st Newsletter

I am delighted to introduce this first ALTYX Financial Planning news letter.

You will note that articles are written in English or French reflecting the significance of the matter.
I hope that you find it to be both interesting and informative.

Please do not hesitate to contact me at if you would like to discuss any of the articles or indeed have any questions.

The July 2015 Budget

New “15 year” deemed domicile rule 

Once an individual has been UK resident in more than 15 out of the past 20 tax years they will be deemed to be UK domiciled for all tax purposes. 
When deemed domiciled an individual will no longer be able to benefit from the remittance basis, and will instead be subject to UK tax on their personal worldwide income and gains on an arising basis.  They will also be liable to UK inheritance tax on their worldwide assets; not only those situated in the UK. 
It is intended that the new 15 year rule will apply from 6 April 2017. 
An individual who is deemed domiciled under the 15 year rule will need to spend more than five tax years outside the UK in order to lose their UK domicile for tax purposes and “restart the clock”. 

Returning “UK doms” 

A returning UK domiciled individual, who may have acquired a domicile of choice, will once again be treated as UK domiciled on arrival in the UK.
Annual remittance basis charges 
The level of charge varies depending on the length of time the individual concerned has been UK resident.  Currently, the annual charge is £60,000 for those who have been resident in 12 out of 14 tax years and £90,000 for those who have been resident in 17 out of 20 tax years.
Increases in these charges were widely anticipated prior to the Budget day.  However, the Chancellor has opted to leave the £30,000 and £60,000 remittance basis charges unchanged.  The £90,000 charge will be irrelevant from April 2017 onwards as those who have been resident for more than 15 out of the last 20 tax years will no longer be eligible to claim the remittance basis in any event because of the new “15 year” rule. 

Personal Allowance

The Personal Allowance for income tax will increase gradually along with the Basic Rate Band.
You can find here the changes in the personal allowance, the basic rate limit and the higher rate limit as follows
     2015/16            2016/17         2017/18     
 Personal Allowance     £10,600     £11,000     £11,200
 Basic Rate Threshold     £31,785     £32,000     £32,400
 Higher Rate Threshold             £42,385     £43,000     £43,600
Taxation of Dividends 

From April 2016, the system of applying a “10% notional credit” to dividends will be abolished and replaced with a £5,000 tax free allowance on dividends each year. It is anticipated that dividends received will no longer be “grossed up”, and will instead be taxed at 7.5% for basic rate taxpayers, 32.5% for higher rate taxpayers or 38.1% for additional rate taxpayers. 

Restricting mortgage interest expense for buy-to-let landlords 

Buy-to-let landlords are currently able to offset the interest, paid on mortgages taken out to acquire their buy to let properties, against their taxable profits.  With effect from April 2017, the tax relief available on mortgage interest will be restricted to the basic rate of income tax (20%) for all individuals.  
It is not anticipated that this will have any impact on non-resident landlords, who already pay UK income tax at 20%. 

Inheritance tax 

A new tax free “main residence” nil-rate band will be introduced for inheritance tax purposes.   
The new allowance will apply to estates where the deceased had an interest in a residential property, which had been their residence at some point, and it is left to one or more direct descendants (e.g. children or grandchildren) on their death. 
The allowance will be set at £100,000 initially in April 2017 and will increase annually until it reaches £175,000 in April 2020. It will be available to supplement the existing inheritance tax threshold of £325,000 which applies to all estates
Special rules will apply to protect those who downsize.

Reduction in Pension Relief for High Earners 

Currently individuals with an adjusted taxable income in excess of £150,000 pay income tax at 45%, and receive tax relief at their marginal rates on money purchase pension contributions up to the Annual Allowance of £40,000.
From April 2016 the government will introduce a taper to the Annual Allowance for those with adjusted annual incomes over £150,000.

What does this mean?

For every £2 of adjusted income* over £150,000, an individual's Annual Allowance, the limit on the amount of tax relieved pension saving that can be made by an individual or their employer each year, will be reduced by £1, down to a minimum of £10,000.
This results in an Annual Allowance of £40,000 for those with an adjusted income of less than £150,000; a reducing Annual Allowance for those with adjusted incomes between £150,000 and £210,000 and an Annual Allowance of £10,000 for those with an adjusted income over £210,000.

Reduction in Pension Lifetime Allowance

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).
This continues the trend in recent years that has seen the LTA cut from its peak of £1.8m in 2011/12.

Further reductions in corporate tax

Corporation Tax will drop by 1% in April 2017, reducing the rate to 19% for the financial years 2017/18 -2018/19- 2019/20.
The rate will drop a further 1% in  April 2020 , reducing the corporation tax to 18% from April 2020.


Change in the FSCS Deposit Limit

The Prudential Regulation Authority has announced changes to its rules to implement the new level of deposit protection provided by the Financial Services Compensation Scheme.

This will mean retail customers and small business will continue to receive deposit protection of up to £85,000 until 31 December 2015, after which a new deposit protection limit of £75,000 will come into effect.

The FSCS Deposit Guarantee Schemes Directive sets the coverage level at the sterling equivalent of €100,000 (£71,075).

This was set at £85,000 in 2010, at which time it was equivalent to €100,000. Due to the increased strength of the UK economy, the value of the pound sterling has increased and the government ruled it is necessary to reduce the limit.

Firms will write to their customers to inform them about the changes to the deposit protection limit before they comes into effect.

Encadrement des loyers à Paris

Le dispositif d'encadrement des loyers imposant une fourchette de loyers est inscrit dans la loi Alur du 24 mars 2014 de madame Duflot. D’apres cette loi, son application concerne les « zones d'urbanisation continues de plus de 50.000 habitants ». Après les nombreuses controverses, l'encadrement ne s’applique finalement qu'à Paris à partir du 1er Aout 2015 et peut-être, ultérieurement, dans certaines agglomérations pour lesquelles les élus locaux le revendiquent. Pour être opérationnel, l'encadrement des loyers nécessite la mise en place d'observatoires chargés de recueillir les données, tels que l’OLAP (Observatoire des loyers de l'agglomération parisienne) qui existe à Paris  depuis près de 30 ans. Dans les autres villes, si l'encadrement devait être instauré, il nécessiterait d'importants délais pour permettre la mise en place de toutes les instances requises pour cet encadrement.

Une carte interactive permettant de calculer le montant des loyers de référence à Paris a été mise en ligne : 

If you haven’t had the chance to date please do visit our new website. Many thanks to those of you that have, I appreciated the feedback.

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