The main points that could affect you on tax, savings and spending from the Chancellor’s red box
The Autumn Statement 2014 has once again created winners and losers. These are some of the main points that could affect you on tax, savings and spending.
People non-domiciled in the UK already face an annual charge of £30,000, and this remains unchanged. However, those who have been here for 12 of the last 14 years will have to pay £60,000 a year, or £90,000 if they’ve been here for more than 15 of the last 17 years.
Top-end property buyers
The residential property Stamp Duty Land Tax (SDLT) overhaul will mean that those buying properties costing more than £937,000 will be worse off than under the previous regime.
10% is now payable between £925,000 to £1.5m, and 12% on everything above. Those buying a home over £2m will pay £50,000 more under the new policy.
people using companies to purchase properties
Buyers of typically high-end properties who choose to own them through a company, a process known as ‘enveloped’ transactions, will be subject to further additional tax increases. Annual tax on enveloped dwellings (ATED) worth over £2m will be increased by 50% above inflation. From 1 April 2015 to 31 March 2016, the charge on residential properties owned through a company and worth over £2m but not more than £5m will be £23,350; for properties worth over £5m but not more than £10m, the charge will be £54,450; for properties worth over £10m but not more than £20m, the charge will be £109,050; and for properties worth more than £20m, the charge will be £218,200.
Residential property stamp duty has been reformed to smooth the tiers that previously distorted the housing market. The stamp duty percentages now only apply to each incremental stage. Mr Osborne claimed that 98% of buyers will pay less as a result of this reform. Under the new rules, you’ll pay nothing on the first £125,000. Someone buying a property for £275,000 will now pay stamp duty of £3,750 rather than the £8,250 they had to pay under the previous system – saving them £4,500.
NISA savers who use their full allowance
The current £15,000 annual NISA allowance limit will see an inflation-linked rise from 6 April this year, up to £15,240.
The inheritance tax exemption, as applied to members of the armed forces who die in service, is to be extended to aid workers.
Air passenger duty will be abolished for children under 12 this year and then for under-16s the following year, for economy class tickets only.
Motorists were spared a rise in duty on petrol and diesel with many predicting an increase following sharp falls in the price of oil and petrol.
Basic-rate and higher-rate income taxpayers
The amount of money you will be allowed to earn tax-free increases to £10,600 from 6 April 2015, £600 more than the current amount. The level of earnings at which the higher-rate income tax of 40% commences will also increase on 6 April this year to £42,385 from £41,865. A further 430,000 individuals will be removed from income tax, although National Insurance still applies at a rate of 12% after your first £7,956.
Married Individual Savings Account (ISA) savers
It will now be possible to pass on the tax-efficient benefits of NISAs to spouses upon the death of the saver. It will mean the surviving spouse won’t have to start filling in a tax form when they inherit NISA savings from their late spouse. The surviving spouse will inherit the ‘NISA allowance’, for example, the amount that was invested in a NISA. This will not necessarily be the NISA itself.
All air travellers
Airlines will be required to detail extra costs for tickets.
Postgraduates will now be able to take out a student loan to cover the cost of their studies. The loan of up to £10,000 will be available for masters students starting courses in 2016 and excludes courses such as a PhD or postgraduate diploma.