Yesterday George Osborne informed MPs of the current state of the British economy. He outlined various tax reforms that may affect you – the biggest one, Stamp Duty:

1. Stamp duty thresholds changed

As of midnight on 3rd December, the rates of stamp duty have changed. They now only apply to the amount of the purchase price that falls within the particular duty band.

The new rates are as follows:

  • Up to £125,000 – 0%
  • £125,001 to £250,000 – 2%
  • £250,001 to £925,000 – 5%
  • £925,001 to £1.5m – 10%
  • Above £1.5m – 12%

Example: if you buy a house for £200,000, you won’t pay anything on the first £125,000, and will then pay 2% on the next £75,000. Your total bill will be £1,500. Previously you would have paid £2,000, which would have been 1% of the price of the property.

2. Fuel duty frozen

3. Pensions and savings

  • From April 2015 spouses will be able to pass on their partner’s Individual Savings Accounts (ISAs) tax free when they die. Previously spouses would have to pay tax on their partners’ ISAs.
  • The annual allowance for ISAs will increase to £15,240 in April.
  • Tax- free annuities for dependents of people who die under 75.

4. Personal taxes

  • Personal tax allowance to be raised to £10,600 in April.
  • Higher rate income tax threshold increasing to £42,385 in 2015.
  • From 1 May children under 12 won’t have to pay air passenger duty and the age limit will be increased up to the age of 16 from 2016.
  • The 55% death tax passed on to loved ones abolished.
  • £90,000 charge introduced for non-doms who have been resident in the UK for 17 of the past 20 years.
  • Families of aid workers who die in course of their work won’t have to pay inheritance tax (IHT).

5. Business taxes

  • An inflation-linked increase in business rates capped at 2%.
  • National Insurance on young apprentices abolished.
  • Research and development tax credit raised for small and medium-sized (SMEs) businesses.
  • Support extended to small businesses with £500m of bank lending plus £400m government-backed venture capital funds which invest in SMEs.
  • £45m package of support for exporters.

6. Welfare

  • Two-year freeze in working-age benefits.
  • Migrants to lose unemployment benefits if they have “no prospect” of work after a period of six weeks.

7. Education

  • £10,000 loans for postgraduate students who are studying for masters degrees.
  • Employment Allowance worth £2,000 extended to carers.

Other information

 

External links

 

Published on: December 5, 2014