It would not be unreasonable for advisers and clients to have approached the Autumn Statement with a degree of trepidation. In successive years it has been used by the Chancellor as a platform to announce significant tax changes, a number of which are still being digested by many clients, and their advisers. This year's, however, had a very different focus. Few people will complain about the relatively modest proposals announced in the areas of personal finance and taxation. A period of relative stability is very much welcomed.
At first glance, yesterday’s statement sheds little additional light on key issues that remain outstanding. UK resident non-domiciled individuals and their advisers, for instance, still lack the legislative detail in order to plan effectively for the raft of previously announced changes due to take effect from April 2017. Further detail is likely to be included in the draft Finance Bill expected to be published on 5th December 2016. The ‘National Savings and Investment Bond’ is a step in the right direction for savers, although limiting this to a maximum of investment of £3,000 will be of little real benefit to many retired savers. Similarly, it was comforting to hear the Chancellor reaffirm the government’s commitment to raise the personal allowance threshold to £12,500 and the higher rate threshold to £50,000 by the end of parliament in 2020, after which personal allowances will rise in line with the Consumer Price Index (CPI).
As anticipated, tackling tax avoidance remains a key priority. The measures announced yesterday further tighten the noose for those promoting aggressive tax avoidance schemes. In putting additional focus on the concept of “enablers” they do, however, throw up some interesting questions for the professional communities to grapple with.
In moves perhaps less well documented, the government introduced welcome powers for HMRC to take a ‘just and reasonable approach’ to savers who unwittingly incur a disproportionate tax charge that can arise on surrender of investment based life assurance policies. The government also announced a series of measures aimed at bringing the tax treatment of foreign pensions into line with the tax treatment of UK pensions.
For most individuals, however, the key action points will not arise from the proposals outlined yesterday. The key action points are likely to arise from information we already know: the previously announced changes to inheritance tax in the form of the main residence nil-rate band, the changes to stamp duty and the restriction of mortgage interest relief for buy- to- let landlords, the amendments to pension’s legislation and the introduction of various new savings vehicles such as the lifetime ISA. All make planning not just the preserve for the wealthy or non-domiciled individual. Now is the time to conduct some financial “housekeeping” to understand what, if any, action needs to be taken.