I haven't tried this yet but I pulled this from the XCode 7 release notes. Maybe you are running into one of these issues:
Free Provisioning
•
Accounts with expired Apple Developer Program memberships may not be able to use free provisioning.
(20486606)
Workaround: Create a new Apple ID and enter it into Xcode's Accounts preference pane.
•
The list of teams displayed within Xcode's Accounts preference pane may not update to show your new free
provisioning team. (19775448)
Workaround: Remove your Apple ID and add it again in Xcode's Accounts preference pane.
•
When logging in via the Preferences window’s Accounts pane, any standard Apple ID will allow you to log in
and use Free Provisioning. Such logins will not be subject to the Apple Developer Program License
Agreement. (21243707
)
•
You may be asked to select between a free membership and your company team membership when
configuring apps for distribution. (20276021