Autumn Statement 2022

18 November 2022

The Chancellor of the Exchequer, Jeremy Hunt, has announced his Autumn Statement which includes tax rises and spending cuts. Here we summarise the key changes affecting inheritance tax, property tax and personal tax.

Inheritance Tax

  • Inheritance tax thresholds will be maintained at their current levels for a further two years until April 2028. These are a nil rate band of £325,000 and a residence nil rate band of £175,000.

Stamp Duty Land Tax ("SDLT")

In the mini budget in September 2022 some SDLT thresholds were increased. These have not changed meaning that:

  • The nil threshold for SDLT remains at £250,000.
  • The nil threshold for SDLT for first time buyers also remains at £425,000.
  • The value of the property that first time buyers can claim relief against is £625,000.
  • The current SDLT thresholds will remain until 31 March 2025.

Income Tax

  • The threshold for the additional rate of tax of 45% on income over £150,000 has been lowered to income over £125,140. Since April 2010 for those earning more than £100,000 their personal allowance is reduced by £1 for every £2. The lowering of the threshold to £125,140 is therefore dovetailing the loss of a person's full personal allowance of £12,570 straight into the additional rate of tax.
  • Income tax and National Insurance will maintain thresholds set at 2023-24 tax year until April 2028.
  • The dividend allowance will be reduced from £2,000 to £1,000 from April 2023 and then to £500 from April 2024.

Capital Gains Tax

  • The annual exempt amount will be reduced from £12,300 to £6,000 from April 2023, and then to £3,000 from April 2024.
  • The Government will uprate the Married Couple’s Allowance and Blind Person’s Allowance by the September CPI figure of 10.1% for the 2023-24 tax year.
  • Where spouses or civil partners are in the process of separating, from 2023 they can make no gain and no loss transfers of assets between themselves for up to 3 years following separation. If the assets are subject to a formal divorce agreement, then there will be no restrictions on these transfers.

Online Sales Tax ('OST')

  • The Government has decided not to introduce OST, this was initially put forward as part of the Business Rates reform.

Tackling Tax Avoidance and Evasion

  • Additional staff will be employed to enable HMRC to deal with more cases of serious tax fraud and address tax compliance risks among wealthy taxpayers.

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