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The Chancellor’s second Budget of 2017

Mr Hammond will probably be pleased if commentators decide that his Autumn Budget was a steady-as-she-goes, broadly modest Budget. After the national insurance u-turn he was forced to make after his March Budget this year, that was probably his aim.

In any case, for a variety of economic and political reasons, the Chancellor announced a relatively modest net tax giveaway of just under £1.6 billion for the coming tax year.

His main attention-seeking move was to give first time buyers an exemption from stamp duty land tax on the first £300,000 of value for properties worth up to £500,000. Rumours – probably from the Treasury itself – had trailed changes along these lines, and the new relief represents more than a third of his net giveaway.

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Reduction to money purchase annual allowance (MPAA)

At Spring Budget 2017 the government announced that from 6th April 2017 the money purchase annual allowance (MPAA) will reduce to £4,000. Legislation will be included in Finance Bill 2017.

Anyone who has already triggered the MPAA may wish to consider making maximum use of the current £10,000 MPAA prior to 6th April. Once triggered, it is not possible to use carry forward to increase the MPAA.

As a reminder, we have included a list of the actions that trigger the MPAA and our full guide is available at the link below.

The following will trigger the MPAA (either from a UK registered pension plan or from an overseas scheme that has had UK tax relief)

  • Taking income from a flexi-access drawdown (FAD) plan (includes short term annuity purchase) – only withdrawing tax free cash won’t trigger the MPAA
  • Taking an uncrystallised funds pension lump sum (UFPLS) – if the UFPLS is £10,000 or less, see if it’s possible to take the funds as a ‘small pot’ instead as this won’t trigger the MPAA and isn’t a Benefit Crystallisation Event (BCE).
  • Converting capped drawdown to FAD and then drawing some income
  • Taking more than 150% GAD from a capped drawdown plan
  • Receiving a stand-alone lump sum when entitled to primary protection and Tax Free Cash protection is more than £375,000.
  • Receiving a payment from a flexible lifetime annuity (ie. one where payments can decrease)
  • Receiving a scheme pension from a Defined Contribution (DC) arrangement where it’s being paid directly from those DC funds to less than 11 other members (e.g. a SSAS).
  • In addition, anyone who was in the old ‘flexible drawdown’ before 6th April 2015 is subject to the MPAA from 6th April 2015 (irrespective of whether they have taken an income withdrawal before then)

The above relate to a member and their own funds – these triggers don’t apply where benefits are being paid to a dependant/beneficiary (eg. where a beneficiary receives a FAD income payment from a dependant’s/nominee’s/successor’s FAD arrangement this isn’t a trigger).

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Spring Budget 2016

Throughout the Budget announcement, George Osborne’s overall statement of importance was everything is “for the future” but  “What about the present?”big-ben

The Chancellor stated that he wanted to “close tax loop holes” with social media calling for the true chance of this happening. Never the less, the Chancellor attacked several tax issues.

  • Capital Gain Tax rates are to fall for basic rate Tax payers.
  • ISA limits to be increased.
  • Increase high rate threshold.
  • Tax free personal allowance to rise.
  • New “Lifetime ISA”.
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Autumn Statement 2015

In the first combined Spending Review and Autumn Statement since 2007, the Chancellor’s emphasis was on expenditure. He nevertheless made a range of tax-related announcements. The contents of our Autumn Statement summary covers:

  • Highlights
  • Economic background
  • Capital taxes
  • Savings and pensions
  • Personal taxation
  • Business taxes
  • Welfare
  • Tax administration and simplification
  • Tax avoidance, evasion and compliance
  • Main income tax rates and allowance
  • National Insurance contributions

As usual, announcements that may be relevant to our individual clients will be considered within our normal review process. Please do get in touch if you have any queries.

Click below to read our full summary:

 

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