No great surprises for High Net Worth individuals in Autumn Statement 2015

Wed 25 Nov 2015

Recent Budgets and Autumn Statements have been chock full of shocks and giveaways for High Net Worth individuals but Autumn Statement 2015 bucked the trend.

With individuals still getting their head around pensions freedom and significant dividend tax changes, perhaps we should be relieved that the Government announced little in the way of new or amended policies aimed at High Net Worth individuals. However, there were one or two noteworthy items which we have summarised below.

• ISA, Junior ISA and Child Trust Fund annual subscription limits will remain at their current level for 2016-17. The ISA limit will be kept at £15,240. The Junior ISA and Child Trust Fund limits will be kept at £4,080. No major revisions to ISAs were expected and none materialised. The Government is still consulting on a major project that will consider ISA-style pensions and we can expect to see the results of that consultation in the new year.
• The band of savings income that is subject to the 0% starting rate will be kept at its current level of £5,000 for 2016-17. Again, the status quo has been maintained at current levels. We will see tax changes from 6 April, in the form of a £5,000 tax-free dividend allowance for all taxpayers which will replace the dividend tax credit.  Dividend income in excess of £5,000 will be subject to tax at rates which are 7.5% greater for all taxpayers than current effective rates and will affect those with significant dividend income the most.
• The list of qualifying investments for the new Innovative Finance ISA will be extended in Autumn 2016 to include debt securities offered via crowdfunding platforms. The government is still considering extending the list to include equity crowdfunding. The Government has previously consulted on this and has now come to the view that these extensions are beneficial. We now wait to see the take up these investments.
• The government will legislate to allow the ISA savings of a deceased person to continue to benefit from tax advantages during the administration of their estate and will set out further plans for introducing this measure in 2016, following technical consultation with ISA providers. This builds upon previous changes to the ISA inheritability rules.

For more information contact Mark Brownridge