By Duncan Mitchell-Innes
The year’s Autumn Statement contained some significant announcements in areas of personal tax and estate planning. Indeed, whilst Autumn Statements have taken the place of pre-budget reports since 2010, this one seems more akin to a mini-budget.
We’ll be producing separate posts covering in more detail the areas outlined below. However, included here is an overview of the main areas as they relate to estate planning and the related taxes.
- Stamp Duty Land Tax (SDLT) on residential properties has unexpectedly been re-worked so that the ‘slab’ system has been removed and instead a ‘progressive’ system which will include marginal rates has been introduced. This will mean an effective reduction in SDLT for 98% homebuyers who pay it and is similar to the proposed Scottish model.
- The settlement nil rate band is now not going to be introduced. Whilst detailed proposals had been set out for the introduction of this, we do not have details of what is planned in its place.
- On the death of someone who has an individual savings account (ISA), their spouse or civil partner will receive an additional ISA allowance equal to the value of the deceased's ISAs.
- Currently a complete exemption from Inheritance Tax (IHT) applies to the estates of members of the armed forces who die whilst on active, or from an injury sustained whilst on active service. This exemption is now extended to emergency service personnel and humanitarian aid workers responding to emergencies. This change will have retrospective effect for deaths on or after 19 March 2014.
- Related to the above, the previous inheritance tax (IHT) exemption for medals and other decorations for valour or gallantry will be extended to all medals and decorations awarded to the armed services or emergency service personnel, together with awards made by the Crown for achievements and service in public life. This change took effect from 3 December 2014.
The Private Client team at TWM can advise on any specific issues arising out of the above changes. Please do feel free to contact us if you would like further advice.
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