The redesign of stamp duty land tax (SDLT) on homes was arguably the most important change for most people, providing an estimated 98% of buyers with a cut in SDLT and a few at the top end with potentially substantial increases. Below is a summary of the key points from the Statement, full details can be found in the Autumn Statement document at the bottom of this page.
Stamp Duty & Property
- Residential SDLT has been restructured with effect from midnight on 3 December. Buyers will now pay the rate of duty on the portion of the purchase amount that falls within each band (like income tax), rather than a single slab rate for the whole transaction amount. Buyers on the brink of completion may elect to use either scale.
- The rates and thresholds have been adjusted accordingly: there is no tax on the first £125,000 of any residential property transaction, with the top rate at 12% on the slice of value above £1.5 million. Commercial SDLT rates remain unchanged.
Pensions and Savings
- In a major change to the taxation on death for those holding ISAs, for deaths from 3 December 2014 spouses and civil partners will be able to retain the tax free status of ISAs inherited from their deceased spouse or civil partner.
- The ISA allowance will rise to £15,240 for 2015/16.
- The tax treatment of pension annuity payments to dependants will be brought into line with the treatment of ‘flexi-access’ withdrawals from the pension fund. So, if an individual dies before the age of 75, their survivor beneficiary’s benefits will be tax free for payments beginning after 5 April 2015.
- For 2015/16 the personal allowance will increase to £10,600 for 2015/16 and the higher rate threshold above which individuals pay 40% tax will increase to £42,385. As a result over 3 million of the lowest earners will pay no tax at all and 138,000 fewer people will pay higher rate tax.
- Non-domiciled tax payers will have to pay more to stay in the remittance basis of taxation, under which they just have to pay tax on the overseas income and gains they bring into UK. The charge for people who are resident in UK for seven out of the last nine years will remain at £30,000, but will be double for those resident for 12 out of 14 years and will treble for those resident for 17 out of 20 years. The government is consulting on having a minimum three year period for the election.
- There are a very large number of anti-avoidance measures, including one to counter tax avoidance by multi-national companies that earn profits in the UK but use avoidance techniques to divert these profits offshore. The Diverted Profits Tax will be 25%, applied from 1 April 2015.
- Other measures include freezing fuel duty and the abolition of air passenger duty for children under 12 from 1 May 2015 (and for under 16s a year later). VAT is also being removed on expenditure by hospices. The income from Libor fines paid by banks will be distributed between veterans, the emergency services and search and rescue organisations.