Autumn Statement 2014: What you need to know
George Osborne’s Autumn Statement offered much that was expected, but a few surprises too. In addition to confirming major pension reforms, he also announced an equally big revolution in stamp duty – alongside a raft of plans for areas ranging from small businesses to the NHS.
We’ve broken down his lengthy announcement into bite-size chunks:
Pensions and savings
Pensions was the most anticipated area, as the Treasury confirmed plans announced in March 2014.
- Death tax – This tax will be abolished and any unused pension pots can be passed on tax free to your loved ones.
- Annuities – Pensioners who die before the age of 75 can pass on joint or guaranteed annuities to a beneficiary tax free. If the pension holder dies after the age of 75, the remainder of the pension fund will be taxed at the beneficiary’s marginal rate of income tax, or at 45% if taken as a lump sum.
- ISA – The limit on ISAs will be increased to £15,240 from April 2015. ISAs can also keep their tax-free status if the original holder dies and leaves it to a beneficiary.
We saw a small victory for entrepreneurs and SMEs:
- Funding for Lending schemes will be extended by a further year (for business property purchases only).
- There will be a full review of the structure of business rates.
- The Entrepreneurs’ Relief and the Social Investment Tax Relief will be strengthened.
The major changes to stamp duty land tax should encourage more first time buyers onto the property ladder and be welcomed by most homebuyers in general.
- The old stamp duty bands will be abolished, replaced by a more gradual incremental tax:
- 0% on the price of any property up to £125,000
- 2% on the portion of the price between £125,001 and £250,000
- 5% on the portion between £250,001 and £925,000
- 10% on the portion between £925,001 and £1.5 million
- 12% on the portion over £1.5 million
- The changes are in effect from 4 December 2014.
2015 is set to be a big year for financial advice. With so many changes taking place, independent advice will help you be better prepared and more confident to make decisions. Speak to one of our advisers today.
Please note the changes listed above are not a comprehensive list. You can see the full document here on gov.co.uk.