Autumn Statement – the facts

The Chancellor announced in this month’s Autumn Statement a number of tax cuts for personal finance products. He told assembled MPs that that the Government was delivering fairness for savers by giving them the ability to pass on ISAs and pensions tax free, which we of course welcome.


Married savers will now be able to bequeath tax breaks applied to ISAs to their spouses when they die. Ultimately it means that married couples will have less tax to pay. Previously a spouse or civil partner inheriting an ISA would have been liable for tax on the saving if one of them passed away but from 6th April 2015, they will be able to combine their spouse’s ISA to their own, without incurring any tax liability.

In addition to the tax boost, the annual allowance for ISAs will increase to £15,240 in April and savers who take out an ISA will not have to pay tax on income or capital appreciation.

How will this work in practice?

The new ISA rules apply to any deaths from December 3 2014. The surviving partner will get a one-off boost to their total ISA limit which will equal the value of the savings in the ISA they inherit but this can only be applied for from April 2015. In addition, Inheritance Tax, (IHT) is not an issue because married couples can pass assets and investment between themselves.

However, the surviving partner won’t inherit the extra annual ISA allowances that their spouse would have been eligible for had he or she lived on.


The Chancellor also confirmed the 55 per cent ‘death tax’ that currently applies to an unused pension which is passed on to the next of kin will be abolished. He also added that the Government will ensure that people who die before the age of 75 with a joint life or guaranteed term annuity can pass that on tax free too.

Inheritance Tax:

The government has however U-turned on plans to overhaul IHT by applying just one nil-rate band to multiple trusts held by an individual. In his 2013 Autumn Statement George Osborne announced plans to make just one nil rate band available per individual, split across all relevant property trusts.

Documents for the 2014 Autumn Statement have confirmed that the government has decided not introduce a single settlement nil-rate band.


Like most pre-election budgets, the Chancellor is looking to try and woo voters but with every winner, there’s always a loser. The allowance for higher rate payers has been increased slightly by £520 and anyone buying a property under £925,000 will benefit in relation to changes the Chancellor announced in the way Stamp Duty Land Tax is levied.

Anyone buying a property over this amount will find that they have extra stamp duty to pay and individuals who are also buying properties through ‘enveloped companies’ will also face a steep increase in tax..

The key issues to wait for the detail that will be unveiled in forthcoming Finance Bill. Our technical team will examine what is in the Bill and what this means in practice, keeping you informed of any significant changes.

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