In a combined Spending Review and Autumn Statement on 25th November 2015, the Chancellor, George Osborne, made a range of tax-related announcements. The main ones ones are summarised below:
- Buy-to-let properties and second homes’ Stamp duty land tax (SDLT) – From 1 April 2016, purchasers of additional properties, such as buy-to-let properties and second homes will pay an extra 3% in SDLT rates. The extra tax raised will be used to help struggling first time buyers.
- ISAs – The New ISA, Junior ISA and Child Trust Fund annual subscription limits will remain at their current level for 2016/17. The New ISA limit will remain at £15,240. The Junior ISA and Child Trust Fund limits will be kept at £4,080.
- Starting rate of savings tax – The band of savings income that is subject to the 0% starting rate will be kept at its current level of £5,000 for 2016/17.
- Workplace Pensions -The two scheduled increases in automatic enrolment minimum contribution rates will each be deferred by six months to align them with the start of the tax year.
- New single tier state pension from 2016 is set at £155.65 a week.
- Inheritance tax & pensions – New legislation will be introduced to ensure no inheritance tax will arise when someone designates pension funds for drawdown but does not draw all of the funds before death. This will be backdated to apply to deaths on or after 6 April 2011.
- Secondary market for annuities – Individuals will be allowed to sell their annuity income stream on the secondary market. The government will set out further details on this in December.
- Tax-free childcare – The upper income limit per parent for tax-free childcare will be reduced from £150,000 to £100,000. The minimum income level per parent will be increased from the equivalent of 8 hours to 16 hours at the national living wage. So working parents earning above £100,000 will now be better off with the existing childcare voucher scheme.
- Tax avoidance and evasion – Several measures to counter tax avoidance and evasion were announced, including a new criminal offence will be introduced which will remove the need to prove intent for the most serious cases of failing to declare offshore income and gains.
- Making tax digital – Most businesses, self-employed people and landlords will soon be required to keep track of their tax affairs digitally and update HMRC at least quarterly via their digital tax account. Details on how the government plans to transform the tax system will be published shortly.
Source: Canada Life
More information can be found on HMRC’s website by clicking here and on Canada Life’s Autumn Statement summary document.