The personal tax effects of the Autumn Statement 2016

Income tax

The personal allowance will be £11,500 for 2017/2018. It should increase to £12,500 by the end of this Parliament and will then increase in line with CPI

The basic rate tax band will be £33,500.  This means that you can have £45,000.00 of taxable income before paying higher rate tax.

National Insurance

From April 2017 employers and employees will start paying NI from the same threshold of £157 a week, £8,164.00 per annum.

Investment bonds

The Finance Bill will include provisions to allow investment bond owners who unwittingly face a large tax charge because of surrendering part of their bond, to apply to have the gain recalculated on a ‘just and reasonable’ basis from 6 April 2017. There are no firm details of how this will work at present.

Salary sacrifice

From April 2017, the tax and employer NI advantages of salary sacrifice will be stopped except for arrangements involving pensions, childcare, Cycle to Work and ultra-low emission cars. Arrangements in place before April 2017 can continue until April 2018 and those for cars, accommodation and school fees will be protected until April 2021.

Pensions

The money purchase annual allowance will be reduced to £4000 from April 2017. HM Treasury has launched a consultation which closes on 15 February 2017.

The taxation of foreign pensions will be more closely aligned with UK pensions by bringing them fully into tax for UK residents.

HM Treasury will publish a consultation on tackling pension scams. Measures could include banning cold calling in relation to pensions, giving firms greater powers to block suspicious transfers and making it harder for scammers to abuse SSASs.

ISAs

The increase in the ISA allowance to £20,000 from April 2017 is confirmed.

The Junior ISA and child trust fund subscription limit will increase to £4128 from April 2017.

Inheritance tax

From April 2017 inheritance tax will be charged on UK residential property if it is held indirectly by a non-domiciled individual through an offshore structure, such as a company or a trust.

Once the Finance Bill 2017-18 gets Royal Assent, inheritance tax relief for donations to political parties will be extended to parties with members in the Scottish Parliament, the National Assembly for Wales and the Northern Ireland Assembly as well as parties that have won by-elections.

Capital gains tax

From April 2017, the taxation of offshore reporting funds will be aligned with onshore funds in respect of performance fees.

National Savings & Investments (NS&I)

A 3-year savings bond is to be launched with an indicative rate of 2.2%. It will be open to anyone who is 16 or over. The minimum investment will be £100 and the maximum £3,000. It will be available for 12 months from spring 2017.