As you will have likely seen, Jeremy Hunt delivered his Autumn Statement in the Commons yesterday – it was short and relatively uneventful given the financial gossip that has been floating around for the last few weeks. Whilst there aren’t any major changes, I wanted to highlight key points for you:
- Good news for VCT and EIS investors as the opportunity to invest in new schemes is extended to 2035. Don’t worry though, this date has no effect on existing investments and the tax-free dividends you receive from them.
- Class 1 employees National Insurance cut by 2% from January on earnings between £12,570 and £50,270.
- Class 2 National Insurance abolished for the self-employed and Class 4 will be cut by 1% from April.
- State Pensions will increase by 8.5% to £221.20 per week.
- Mr Hunt announced a ‘shake up’ of the pension system aimed at giving workers greater control of where they build their retirement funds. We will wait to see the detail on this.
- Whilst there was no change in the ISA allowances, Mr Hunt did announce that from next April, you will be able to subscribe to multiple cash or stocks and shares ISA in one tax year. You will also be able to make partial transfers of ISA funds. This may be useful in a few cases but we don’t feel this will have much impact on the advice we give.
Lifetime Allowance Legislation
- Amongst all the Treasury documents, HMRC also published some more details on the pension regime for 2024/25. This confirms that the Lifetime Allowance will be abolished and that pension funds that are used by beneficiaries to go into a drawdown policy or buy an annuity will continue to be tax free provided the member dies before age 75. There had been some mention that this would become taxable so this is good news.
- The devil is in the detail and we are expecting that in the Finance Bill coming soon. At that point, we can then look to finalise any ongoing pension advice on this matter.
While there are currently few changes that might impact planning, as ever, we encourage you to get in touch and have a chat if there is anything on your mind.
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