Introduction

The 2012 Autumn Statement was more like a spring Budget than its recent predecessors – particularly in relation to the many tax announcements. The Chancellor made his statement against a background of disappointing economic growth and the near certainty that he will miss one of his key budgetary targets.

The key tax changes include:

  • The personal allowance for 2013/14 will be raised to £9,440.
  • The 40% higher rate threshold will increase by 1% in both 2014/15 and 2015/16.
  • The annual exempt amount for capital gains tax will increase by 1% for 2014/15 and again for 2015/16.
  • As already announced, employee shareholders will have different employee rights from other employees in return for shares that are exempt from capital gains tax.
  • The 2013/14 investment limit for ISAs will rise to £11,520, with the cash ISA limit correspondingly increasing to £5,760.
  • There will be consultations on expanding the list of qualifying investments for stocks and shares ISAs to include shares listed on AIM.
  • The inheritance tax nil rate band will rise by 1% in 2015/16 to £329,000.
  • From 2014/15, the lifetime allowance for pension savings will be reduced from £1.5 million to £1.25 million and the annual allowance will be reduced from £50,000 to £40,000.
  • The capped pension drawdown limit will be increased from 100% to 120% of the value of an equivalent annuity.
  • The main rate of corporation tax, which is currently 24%, will be cut to 21% with effect from April 2014.
  • The annual investment allowance limit for plant and machinery will increase from £25,000 to £250,000 for two years from 1 January 2013.
  • The temporary doubling of the small business rate relief will be extended for a further year from 1 April 2013.
  • A number of anti-avoidance measures were announced, including various enhancements to HMRC’s powers and resources.

© 5 December 2012. This summary is for general information only and is not intended to be advice to any specific person. You are recommended to seek competent professional advice before taking or refraining from taking action on the basis of the contents of this summary. The summary represents our understanding of the law and HM Revenue and Customs practice as at 5 December 2012, which are subject to change. These proposals may be changed in the Spring 2013 Budget and subsequent legislation, or at any time.