This reform to Stamp Duty Land Tax (SDLT) removes the ‘cliff edge’ of the current system around stamp duty thresholds:
- 0% paid for the first £125,000, then 2% on the portion up to £250,000.
- 5% up to £925,000, then 10% up to £1.5m; 12% on anything above that, saving £4,500 on average priced home according to the government.
Minor changes were made to tax allowances and thresholds for the new tax year:
- The personal allowance will rise to £10,600 in 2015/16 for those born after 5 April 1938. This is an additional £100 on what had been previously announced. At the same time, the level at which income tax becomes payable at higher rates will rise in line with inflation to £42,385 (from £41,865), meaning that higher rate taxpayers with incomes below £100,000 will be better off by £224 according to the government.
- Age related allowances will remain at £10,660 for those born before 6 April 1938.
- From the 2015/16 tax year, a spouse or civil partner who does not have income to fully use up their personal allowance will be able to transfer up to £1,060 to their partner, provided that the partner is a basic rate taxpayer.
Other Tax Announcements
Fuel duty to be frozen
UK Non-Domiciled Individuals
The charge to use the non-domicile basis of taxation is increasing.
- Non-domiciles who choose to use the remittance basis and have been resident for at least 7 of the past 9 years, currently pay a charge of £30,000.
- This will increase to £60,000 (from £50,000 in 2014/15) once they’ve been resident for 12 out of 14 years.
- And a new charge of £90,000 will be brought in for those who’ve been resident 17 of the last 20 years in the UK.
- The government will also consult on making the choice to pay the remittance basis charge stick for a minimum of 3 years, so that non-domiciles are not easily able to chop and change the basis on which they are taxed.
- Non-domiciles’ taxation remains in the spotlight and this is unlikely to change. As offshore bonds are not taxed until a chargeable gain arises, they may offer another way for non-domiciled individuals to control when and how they pay their tax.
This commentary is our understanding of the Autumn Statement on 3 December 2014. It is for general information only and does not constitute advice. If you would like advice on financial planning, please do not hesitate to get in touch with us on 01392 875500 or info@SeabrookClark.co.uk