News

The Chancellor delivered the Autumn Statement on 5th December. This was against the now familiar background of austerity measures, although retrospective figures indicated that the UK had not, in fact, experienced a double dip recession. The Chancellor signalled that Britain's economic plan is working.

There were a few fiscally neutral tax breaks, perhaps as an appetiser for next year’s Autumn Statement, which will be the last before the 2015 General Election.

There were only a few surprises, which is a pleasant trend introduced by the Coalition who tend to consult and/or forward brief so that tax changes can be more readily understood once formally announced.

Most of the proposals are subject to refinement and amendment before they become law via the 2014 Finance Act.

Highlights (affecting tax positions in the year 2014/15, unless otherwise stated)

• The personal allowance will increase to £10,000
• The higher rate (40%) tax threshold will increase by £415 to £41,865
• The 45% tax rate band is unchanged, affecting those with income over £150,000
• The 60% tax rate band will apply for income between £100,000 and £120,000 (created by progressive withdrawal of allowances)
• A transferable tax allowance of £1,000 will be introduced for married couples and civil partners from April 2015
• From 6th April 2015 employers will no longer pay Class 1 national insurance contributions on earnings paid up to the upper earnings limit to any employee under the age of 21
• In October 2015 a new class of voluntary NICs (3A) will be introduced to allow pensioners who reach state pension age before 6th April 2016 to top up their Additional Pension entitlement
• The overall annual individual savings account (ISA) subscription limit for 2014/15 will rise to £11,880, of which £5,940 can be invested in cash
• The final exemption period for main residence capital gains tax relief will be reduced from 36 to 18 months from April 2014
• From April 2015, capital gains tax will apply to gains on residential property owned by non-resident individuals
• New ‘simplified’ Inheritance Tax rules for trusts will be introduced from April 2015
• Personal Pension legislation was untouched, for the first time in seven years. It should be noted that significant changes in the lifetime and annual allowance limits are occurring from 6th April 2014

If you wish to discuss the changes or your tax affairs in general, please contact your relationship manager who will introduce you to a member of our tax team.