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Chancellor’s Autumn Statement – Summary of Key Tax Changes
The Chancellor’s autumn statement 2014 included a number of key tax savings that will affect significant numbers of clients. Below is a summary of the key points of interest.
Stamp Duty Land Tax (“SDLT”) : revised structure, rates and thresholds for residential property
- The previous ‘slab’ system is replaced by a ‘slice’ system – allowing only the part of the property value falling within a specific ‘slice’ or band to be charged at that rate.
- The new rates apply for transactions completing on or after 4th December 2014
- Only residential property transactions are affected
- The government is claiming a reduction in SDLT for 98% of those paying the charge, which beneficially affects property transactions worth up to £937,500
- The new rates only apply to home bought in Scotland until 31st March 2015, after which date the Land and Buildings Transaction Tax (LBTT) replaces SDLT in Scotland.
The new rates applicable are:
- 0% on any amount up to £125,000
- 2% on any amount over £125,000 up to £250,000
- 5% on any amount over £250,000 up to £925,000
- 10% on any amount over £925,000 up to £1,500,000
- 12% on any amount over £1,500,000
For a more detailed summary of SDLT changes, please see our associated article or contact us directly on email@example.com
ISAs: transfer to spouses on death and subscription limit
Changes have been announced to both the ISA subscription limit and the status of ISA allowances of deceased spouses. Having already provided the opportunity for transfer of the unused nil rate band allowance between spouses, it appears that this system will be extended to incorporate the transfer of the ISA allowance to a surviving spouse. Details are still to be provided, but the scheme – which applies to deaths on or after 3rd December 2014 – appears to provide a surviving spouse with an additional ISA allowance equal to the value of the deceased spouse’s ISA funds. In addition, the ISA subscription limit will increase to £15,240 (from £15,000) and the junior ISA limit to £4,080 (from £4,000) from 6th April 2015. For further information about the application of this or any other tax change to your personal estate, please contact us directly on firstname.lastname@example.org
Personal allowance and higher rate threshold to increase from April 2015
The personal allowance for those born after 5 April 1948 will increase to £10,600 and the higher rate threshold will increase to £42,385 for 2015-16, which increases are higher than originally planned. Increases were also announced to the blind person’s allowance, married couple’s allowance, income limit, National Insurance upper earnings and upper profits limits.
For further information about how the changes apply to your individual estate, or to review or revise your current Will position, please contact Christopher Johnson, Judith Bleetman or Lucy Thomas at our Cockfosters office at email@example.com or on Tel 020 8441 1556