Rebecca Beresford, Partner at Mogers Drewett, comments on the private client aspects of the Chancellor’s Autumn 2017 budget.
In the run-up to the Budget, many observers felt the Chancellor could have pensions on his hit-list. However, they were largely left untouched, perhaps due to the focus on Brexit. As mentioned in the Spring Budget, the lifetime allowance for pensions will increase in line with the Consumer Price Index, rising to £1,030,000 for 2018/2019 which is good news for savers with fewer pension benefits incurring an extra tax charge.
In line with the Conservative’s pledge to increase basic rate to £12,500 by 2020, from April the rate will rise to £11,850 with the 40% threshold increasing to £46,350. This could save some thousands a year, with the Chancellor claiming that this means the typical basic rate tax payer will be £1,075 a year better off compared to 2010 while a full-time worker on the National Living Wage will take home more than £3,800 extra.
The Chancellor announced that stamp duty will be abolished for first-time buyers for homes worth up to £300,000, saying he wants to help people saving to buy a home. In addition, people buying a home worth up to £500,000 will not have to pay stamp duty on the first £300,000 which is intended to help first time buyers in very high price areas like London.
This reduction in stamp duty for first time buyers can only be welcomed. The more young people that can get on the ladder, the more active the whole market becomes. That said, because it only targets first time buyers and will possibly help those in the South East the most, its effect overall is likely to be limited. The property market in and around the South West region has been solid but unspectacular recently – we don’t expect this move to change that.
The recently released Paradise Papers shocked many with their allegations of continuing tax evasion by the wealthy. It is no surprise to see the Chancellor continuing his efforts to combat tax avoidance with measures to save £4.8bn by 2022-2023. Plugging up any gaps is both politically popular and can bring much-needed millions into the public coffers.