Autumn Statement 2015
Despite this year's Autumn Statement reiterating many of the measures set out in previous Budgets, there were still some new announcements.
Our electronic Autumn Statement Report, provides further analysis on the changes, key facts and figures, and useful financial planning tips. A video will also be available to view this afternoon. (Please note that, if viewing the report on a desktop computer, you will need to have Adobe Flash Player installed.)
Pensions Tax Relief
The response to the government’s consultation on pensions tax relief issued following the Summer Budget will not be published until the Budget 2016 in March. The government remains concerned about the growth of salary sacrifice arrangements and is considering what action, if any, is necessary. The government will gather further evidence on salary sacrifice arrangements to inform its approach.
Changes to State Pensions
The government announced an increase in the State Pension of £3.35 per week (pw) to £119.30pw from April 2016, and confirmed a new single-tier pension of £155.65pw for new pensioners from April 2016.
The increases in contribution bands under automatic enrolment have been deferred. Those which were due to take effect from October 2017 will now take effect from April 2018, and those from October 2018 have moved to April 2019.
Secondary market for annuities
In the Summer Budget, the government confirmed that further details of its intention to create a secondary market for annuities would be issued in Autumn 2016. The government has now announced that this will be published in December, including the framework for the consumer protection package.
The ISA and Junior ISA allowances will remain at £15,240 and £4,080 respectively for the tax year 2016/17.
Inherited ISA allowances
The government will legislate to allow the ISA savings of a deceased person to continue to benefit from tax advantages during the administration of their estate, and will set out plans for introducing this measure in 2016 following technical consultation with ISA providers.
Capital Gains Tax
With the government’s planned further digitisation of tax returns, from April 2019 Capital Gains Tax will become payable within 30 days of disposal of residential property.
Stamp Duty on buy-to-let and second homes
The government is increasing Stamp Duty Land Tax by 3% on buy-to-let and second homes from April 2016. The government will shortly issue a consultation considering whether an exemption for corporates and funds owning more than 15 residential properties is appropriate.
The government confirmed its ongoing commitment to tackling tax avoidance and aggressive tax-planning schemes and announced a budget of £800m for HMRC to further tackle tax evasion and impose additional fines and penalties.
Other key announcements
Deeds of variation
Following the review announced in the Budget in March this year, the government will not introduce new restrictions on how deeds of variation can be used for tax purposes but will continue to monitor their use.
VCTs and EISs
While there were no changes to the overall rates of reliefs available for individual investors, the government announced an additional measure to exclude all remaining energy generation activities from VCT, EIS and Seed EIS. This will take effect for investments made on or after 6 April 2016. However, the opportunities remain until 5 April 2016.
Overall, the Autumn Statement emphasises the need for careful consideration of how to structure your assets in a tax-efficient manner, and the importance of ensuring you maximise the opportunities available.
Should you wish to discuss any of the detail contained in this note, please do not hesitate to contact my office.
The value of an investment with St. James’s Place may fall as well as rise. You may get back less than the amount invested. The levels and bases of taxation, and reliefs from taxation, can change at any time and are dependent on individual circumstances.