Your tipple of choice may be cheaper, but how does the 2015 budget affect your divorce settlement?
- With pension freedoms extending to existing pensioners, you may have more flexibility to reach a settlement that meets your family’s needs. Pensions will no longer be seen as just an income stream and could instead be used to purchase property, pay a lump sum or to assist with the funding of legal fees.
- The new ISA limit increases by £240. Spouses and civil partners will be able to retain tax benefits on the other’s death.
- In autumn 2015, working families will be able to benefit from a voucher scheme, receiving up to £2,000 per annum towards childcare costs for each child under 12.
- The expected fuel duty increase has now been shelved.
- Restrictions on the use of Entrepreneurs’ Relief, in relation to personal assets used in a business, mean that Capital Gains Tax (CGT) will need to be carefully considered. Save for the main family home, assets transferred to a spouse outside the tax year of your separation may be subject to Capital Gains Tax.
- VAT rates remain the same for now. An extra factor to consider when budgeting for legal costs. The more you and your partner can agree direct, the better.
- The abolition of annual tax returns will alter financial disclosure requirements. It is important that you obtain full financial disclosure from your spouse or civil partner, to ensure that you do not sell yourself short.
- The review of deeds of variation used to reduce inheritance tax highlights the importance of carefully drafted Wills and proper estate planning; particularly when entering into a new relationship.
If you would like more information on any of the issues covered in this article or any other area of family law, please contact our Family team on 01332 226 174.