How does the Autumn Statement affect you?
01 December 2016
There were no big surprises in this year's Autumn Statement delivered by Philip Hammond. The Chancellor focused more on infrastructure spending than on reforming financial measures. However, below are some of the key points raised that may be of interest.
Income Tax
The personal allowance will increase to £11,500 from 06th April 2017 and the point at which the higher rate of income tax will apply will increase to £45,000 from 06th April 2017. By the end of the parliament, the government will meet its commitment to increase the personal allowance to £12,500 and the point at which the higher rate of income tax will apply will rise to £50,000.
Inheritance Tax
The current nil rate band of £325,000 will remain frozen at this level until April 2021. From April 2017, an additional nil rate band will apply where a residence is passed on death to a direct descendant. The residence nil rate band will also be available when a person downsizes or ceases to own a home on or after 08 July 2015 where assets are passed on death to direct descendants.
Corporation Tax
The Chancellor made a commitment to cut Corporation Tax from 20% to 17% by 2020.
Salary Sacrifice
From April 2017, the income tax and National Insurance benefits of salary exchange schemes will be removed for some arrangements. This will not affect pensions, advice, childcare, cycle to work and ultra low emission cars. Arrangements in place before April 2017 will be protected until April 2018 and arrangements for cars, accommodation and school fees will be protected until April 2021.
Money Purchase Allowance
The money purchase annual allowance will be reduced from £10,000 to £4,000 from April 2017. The aim of this is to minimise the recycling of pension savings. The government are consulting on the detail of this.
Pension Scams
A consultation on the options for tackling pension scams including pensions cold calling will shortly be published. It is hoped that this will give firms increased powers to stop suspicious transfers and abuse of self-administered schemes.
ISA Contribution Limits
It was confirmed that the ISA threshold will increase from £15,240 to £20,000 in April 2017. The junior ISA threshold will increase from £4,080 to £4,128.
If you wish to discuss any of the proposed measures above to understand what it could mean for you or your business, please do not hesitate to contact one of our advisers on 0117 907 1965 or email info@absolutewm.co.uk.
Categories: Inheritance Tax, Tax
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