Autumn Statement 2014

Autumn Statement 2014
“The government will continue to take the
difficult decisions needed to secure a
responsible recovery and to stay on course to
prosperity. The government’s goal is a
stronger economy in a fairer society.”
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Personal Tax
From 6 April 2015, the basic personal
allowance will increase to £10,600
(rather than the £10,500 announced at
Budget 2014) and from 2015/16, basic
rate taxpayers will now be able to transfer
up to £1,060 of their personal allowance
to their spouse or civil partner.
The basic rate limit will be £31,785
and so the higher rate threshold above
which individuals pay Income Tax at 40%
will be increased to £42,385.
The clamp down on non-doms
continues. Legislation in Finance Bill
2015 will see the Remittance Basis
Charge (RBC) paid by non-domiciled
individuals resident in the UK for 12
out of the last 14 years increase from
£50,000 to £60,000. A new charge of
£90,000 will be introduced for people
who have been UK resident for 17 of
the last 20 years. There is also to be a
consultation on whether the election to
pay the RBC should apply for a
minimum of three years.
The inheritance tax regime remains
unchanged with the rates remaining at
20% (chargeable lifetime transfers) and
40% (transfers on death). A new online
service for IHT will be provided by
HMRC during 2015/16.
Next year’s capital gains tax rates
will remain at 18% (lower rate) and 28%
(higher rate) with the annual exemption
increasing slightly from £11,000 to
£11,100 in 2015/16. From April 2015,
non-residents will be liable to capital
gains tax on disposals of UK residential
property.
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Business Tax
Corporation tax rates remain as
previously announced. From 1 April
2015 the main rate of corporation tax
will be reduced to 20%, thereby
eliminating marginal relief:
Year to 31 March
First £300k
Next £1,200,000
Over £1,500,000
2016
20%
20%
20%
2015
20%
21.25%
21%
Savings,
Investments &
Pensions
Legislation to be included in Finance
Bill 2015, to take effect from 6 April
2015, will mean the end of a 55% tax
charge on inherited pensions. From
April, any money left in the pension pot
of someone who dies before the age of
75 can be inherited tax-free.
If somebody dies at the age of 75 and
over, the funds can remain in a pension
with no tax to pay or be withdrawn by
the beneficiary (subject to his or her
normal rate of income tax).
The £2,000 Employment Allowance for
Employer
National Insurance
Contributions (NICs) will be extended
to households that employ care and
support workers.
Employer NICs up to the upper earnings
limit for apprentices under the age of 25
will be abolished.
The doubling of the Small Business
Rate Relief was extended for a further
year from 1 April 2015
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The Government will introduce
legislation to allow an additional ISA
allowance for spouses or civil
partners when an ISA saver dies,
equal to the value of the deceased’s
ISAs.
Other Announcements
The Government has announced a review
of
arrangements
by
Umbrella
Companies which enable workers to
obtain tax relief for expenses which would
not ordinarily be available.
Radical reform to the amount of Stamp
Duty Land Tax payable on the purchase
of residential property has been introduced
with immediate effect (from 4 December
2014). Going forward, SDLT will be
staggered so that it is payable at different
rates depending on the amount of the
purchase price that falls within each band,
rather than at a single rate on the whole
transaction value.
There are separate rates for acquisitions of
‘residential’ and ‘non-residential property’
The rates for residential property are given
below:
Until 3 December 2014
Purchase Price
£0 - £125,000
£125,001 - £250,000
£250,001 - £500,000
£500,001 - £1,000,000
£1,000,001 - £2,000,000
Over £2,000,000
Rate
0%
1%
3%
4%
5%
7%
Lump sum payments made under the
new
Armed
Forces
Early
Departure Scheme are exempt from
income tax and NICs. This will take
effect from 1 April 2015, when the new
scheme is introduced.
And further good news for service
personnel : the existing IHT
exemption for medals will be
extended to apply to all decorations and
medals awarded to the armed services
or emergency services personnel.
From 4 December 2014
Purchase Price
£0 - £125,000
£125,001 - £250,000
£250,001 - £925,000
£925,001 - £1,500,000
Over £1,500,000
Rate
0%
2%
5%
10%
12%
Finally, another package of 7 tax avoidance measures was introduced with
immediate effect to help tackle tax avoidance, address unfair tax outcomes and support
investment.
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