Chris Wagstaff, head of pensions and investment education at Columbia Threadneedle Investments, said many would still be worse off: “Triple locked basic state pension up 2.9% in April to £119.30 pw means 80% of those reaching SRA in 2016 will be worse off with new state pension. There have also been no measures to increase full eligibility to “missold” single tier state pension beyond current 38% of those reaching SRA in 2016; and no softening of transitional arrangements for women born in the 1950s affected by accelerating SRA from 60 to 65 seems very unfair.”
Changes
There were also some small changes to the inheritance tax rules around pensions, which have already undergone significant reform. The report said: “The government will legislate to ensure a charge to inheritance tax will not arise when a pension scheme member designates funds for drawdown but does not draw all of the funds before death. This will be backdated to apply to deaths on or after 6 April 2011.”
The Autumn Statement also detailed new arrangements for the payment of capital gains tax. At the moment, tax is paid anywhere between 10 and 22 months after a disposal is made. The government said this put it out of line with other taxes and said that from April 2019, the tax will be payable within 30 days of completion of any disposal of residential property.
Elsewhere, there were also some amends to the eligibility rules for VCT and EIS schemes. With effect from 30 November 2015, the provision of reserve energy generating capacity and the generation of renewable energy benefiting from other government support by community energy organisations, will no longer be qualifying activities.
The government also announced a consultation into Business Investment Relief, with the aim of making it more attractive for investors. It also extended the availability of the £40bn UK Guarantees Scheme for infrastructure projects to March 2021, to continue to help infrastructure projects raise finance from banks and the capital markets.
HM Revenue & Customs
Finally, the chancellor announced plans to transform HMRC into ‘one of the most digitally advanced tax administrations in the world’, with access to digital tax accounts for all small businesses and individuals by 2016-17. The chancellor has ear-marked £1.3bn for the change.
Overall, the statement held relatively few surprises and the chancellor’s key targets remained the same. Savers may be disappointed the chancellor has not sustained his momentum on pension and ISA changes, but some may be grateful that there is a respite from changes to the rules.
