Autumn Statement tax announcements
The 2014 Autumn Statement contained several tax surprises and turned out to have some of the characteristics of a mini–Budget.
Residential stamp duty land tax (SDLT) was restructured with effect from midnight on 3 December 2014. Property buyers now have to pay a rate of duty on the portion of the purchase amount that falls within each band in much the same way as income tax.
The rates and thresholds have been adjusted. There is no tax on the first £125,000 of any residential property transaction and the rates then rise to 12% on the slice of value above £1.5 million. The net effect will be to reduce SDLT for 98% of homebuyers.
ISAs An unexpected announcement was that spouses and civil partners will be able to inherit their deceased spouses’ or partners’ ISA balances for deaths on or after 3 December 2014. The balances will continue to earn tax free returns. The details of how this will operate should be announced in due course.
Peer to peer (P2P) lending A new relief will be introduced allowing individuals who lend through P2P platforms to offset any losses from loans that go bad against other P2P income. It will be effective from April 2016 and individual investors will be able to make a claim for relief on losses incurred with effect from April 2015.
Non-UK domiciled individuals who wish to use the remittance basis of taxation will have to pay higher charges if they have been UK residents in 12 out of the last 14 years or 17 of the last 20 years. The government will also consult on making the election for the remittance basis apply for a minimum of three years.
Inheritance tax The government no longer plans to introduce a single settlement nil-rate band as it originally proposed.
However, there will be new rules to target avoidance through the use of multiple trusts and simplify the calculation of trust taxation.
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