WealthMe newsletter

1. Autumn statement announcements

George Osborne delivered his Autumn Statement on 25 November and it focused on economic and national security.

Rather than cover all announcements in depth, please find below a list of some of the key announcements.

Income Tax

  • By the end of the decade, everyone will have a digital tax account, whereby they can keep track of their tax affairs
  • The government will restrict tax relief for travel and subsistence expenses for workers engaged through a personal service company

Pensions

  • The government remains concerned about the growth of salary sacrifice arrangements and is considering what action, if any, is necessary – they will gather further evidence
  • Pensions tax relief consultation – the government is interested in considering suggestions on whether and how the current system of pensions tax relief could be reformed
  • Secondary market for annuities – the government will remove the barriers to creating a secondary market for annuities, allowing individuals to sell their annuity income stream

ISAs

  • The annual subscription limits will remain at their current level for 2016-17 (adult ISA: £15,240; Junior ISA: £4,080)
  • Legislation will allow the ISA savings of a deceased person to continue to benefit from tax advantages during the administration of their estate; further plans for introducing this measure will be released in 2016

Inheritance Tax (IHT)

  • IHT receipts are forecast to rise to  £5.6 billion by 2020/21, an increase on the estimate for the current tax year of 47%
  • The government will not introduce new restrictions on how deeds of variation can be used

Capital Gains Tax (CGT)

  • CGT will be payable within 30 days of the disposal of any residential property (for example, buy-to-let properties) from April 2019

Offshore

  • There will be a new criminal offence for the most serious cases of failing to declare offshore income and gains
  • The civil penalties for deliberate offshore tax evasion will increase and there will be new penalty linked to the value of the asset on which tax was evaded plus increased public naming of tax evaders

Corporation tax

  • As previously announced, the headline rate of corporation tax will fall to 18% by the end of the Parliament (2020)

Stamp duty

  • Higher rates of SDLT (+3%) will be charged on purchases of additional residential properties (above £40,000), such as buy-to-let properties and second homes, from 1 April 2016

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