Highlights from the Autumn Statement

Posted: Feb 19, 2016

The Chancellor's third set piece of last year was almost another Budget.

After a Budget in March and another in July, it might have been thought that Mr Osborne would have little new to say in his Autumn Statement, but this proved not to be the case in two important areas.

Tax and additional homes

In his July Budget the Chancellor announced two measures aimed at individual investors in the buy-to-let market and the Autumn Statement added two more.

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Tax planning ahead of the spring Budget

Posted: Feb 19, 2016

You may want to step-up your year end tax planning in anticipation of the third Budget in the space of 12 months.

Year-end tax planning is normally best completed before Budget day and in 2016, this principle means acting before 16 March. Not only is there a risk of anti-forestalling measures, but the Easter holiday falls between the Budget and tax year end. The 2015/16 tax year end checklist is dominated by pensions, but there are other areas - both familiar and new - to consider:

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The new state pension

Posted: Feb 19, 2016

The single tier state pension starts life on 6 April 2016, but even the Pensions Minister has doubts about how much of it the public understands.

A man born after 5 April 1951, or a woman born at least two years later, will not receive a basic state pension when they reach state pension age (SPA). Nor will they receive any additional state pension, such as the state second pension (S2P). Instead, as of 6 April they will be entitled to the new single tier state pension, which begins on 6 April 2016.

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Relief as pension tax stays untouched

Posted: Mar 08, 2016

The Chancellor's decision to defer any major changes to pension tax relief is a sensible one, with automatic enrolment at its peak and the pension freedoms still bedding in. The fact that the Government has conducted such an open debate on incentives to save has been useful though. Not least, it has reinforced how important it is to make the most of the current pension tax system.

With retirement savings very much in the news, now is a good time to recap the true value of the current incentives to save in to a pension.

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Can you really avoid inheritance tax?

Posted: Jun 24, 2016

Inheritance tax (IHT) was once famously described as "a voluntary levy paid by those who distrust their heirs more than they like the Inland Revenue" by Roy Jenkins, a former Chancellor of the Exchequer. 

When Gordon Brown was Chancellor of the Exchequer, he called IHT a  "voluntary tax" because he said there were many ways to avoid it.

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Stay covered for the rainy days

Posted: Jun 24, 2016

Whatever your view about the principle of providing people with social security benefits if they are ill or unemployed, it is inadvisable to try living solely on what the State provides in such circumstances. The so-called "safety net" is lower than you may think it is.   

After the recent U-turn on the Personal Independence Payments (PIP), the government has said there will be no more benefit cuts beyond those already planned, but that does not mean that you or your family could comfortably rely on State support to make ends meet during such times.

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Don't fall into the gifting tax traps

Posted: Jun 24, 2016

New tax rules introduced in April have changed your options when investing for children.

If you give money or investments to your unmarried minor child, then the tax rules can catch you out. HM Revenue & Customs (HMRC) is suspicious that such gifts are an attempt to avoid tax on the part of the donor, so the law says that if the total income generated from all such gifts exceeds £100 per tax year, that income is taxed as that of the parent. The rule operates on a per parent, per child basis, but it can still be difficult to avoid crossing the £100 threshold.

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Buy-to-let: strike five

Posted: Jun 24, 2016

The buy-to-let sector is under Treasury attack

The government appears to have taken aim at buy-to-let investors in its efforts to help "generation rent" become first time buyers.

In the last year there have been five important announcements:

1. A phased reduction in tax relief for mortgage interest down to 20% by 2020/21;

2. The replacement in 2016/17 of the 10% wear-and-tear allowance with one based on costs the landlord has actually incurred;

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How much lower for longer?

Posted: Jun 24, 2016

March 2016 marked the seventh anniversary of a 0.5% Bank of England base rate, but other interest rates are still falling. 

"Lower for longer" is now a commonly used phrase when economists and bankers discuss the future of interest rates. The view is supported by banks and other deposit takers, which continue to reduce savers' rates. Shortly after Easter, National Savings & Investments (NS&I) joined the rate cutters. From June Income Bonds and the Direct ISA will then pay only 1%.

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On the lookout for LISA

Posted: Jun 24, 2016

Will next year's Lifetime ISA be a real pension alternative?

The rumour machine that operates before each year's Budget went into overdrive in 2016. First there was a steady flow of stories about changes to pensions that would see flat rate tax relief replace full income tax relief on pension contributions. Then, shortly before the Budget, there was a widely covered unofficial statement that the Chancellor had decided to make no changes. As it turned out, both rumours had an element of truth.

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