No significant changes. Despite significant speculation of changes in personal and capital taxes, the Chancellor has refrained from introducing any material changes in these areas.
Income tax additional rate threshold
The income tax additional rate threshold (ART) will be lowered from £150,000 to £125,140 from 6 April 2023. The ART for non-savings and non-dividend income will apply to taxpayers in England, Wales, and Northern Ireland. The ART for savings and dividend income will apply UK-wide.
Despite speculation of a possible increase in dividend tax rates to align more closely with income tax rates, the only change announced is the reduction in the dividend allowance from £2,000 to £1,000 with effect from April 2023, and to £500 from April 2024.
Inheritance tax (IHT) nil-rate band & residence nil-rate band
The inheritance tax nil-rate bands were previously set at current levels until April 2026 (£325,000 nilrate band and £175,000 residence nil-rate band). These will now stay fixed for a further two years until April 2028. The residence nil-rate band taper will continue to start at £2 million. Qualifying estates can pass on up to £500,000 of unutilised nil-rate band value on death to a surviving spouse. The qualifying estate of the surviving spouse can avail of up to £1 million of aggregate nil-rate bands before incurring an inheritance tax liability.
Despite concerns of restrictions to IHT reliefs (and in particular the Business Property Relief regime), no changes were announced to existing IHT reliefs or rates.
Capital Gains Tax Annual Exempt Amount
The capital gains tax annual exempt amount will be reduced from £12,300 to £6,000 from April 2023 and to £3,000 from April 2024. There are no other material changes to the current CGT regime and all current rates and reliefs remain unchanged.
Share for Share Exchange
The Chancellor has introduced a new piece of anti-avoidance legislation for UK resident non-domiciled individuals. The new provision restricts access to the remittance basis of taxation on future CGT disposals and income distributions where a share exchange has taken place under which shares or securities in a UK close company are exchanged for an equivalent holding of securities in a non-UK company. The measure will have effect for share exchanges which take place on or after 17 November 2022. The restriction to the remittance basis will be achieved by treating the new holding of securities in the non-UK company as UK situs property.
Stamp Duty Land Tax cuts
On 23 September 2022, the government increased the nil-rate threshold of Stamp Duty Land Tax (SDLT) from £125,000 to £250,000 for all purchasers of residential property in England and Northern Ireland. The nil-rate threshold available to first-time buyers was increased from £300,000 to £425,000 at the same time. These increased SDLT thresholds will now remain in place until 31 March 2025.
Get in touch
If you have any questions on the personal tax measures announced in the Autumn Statement, please contact Kevin Bell of our Tax team. We'd be delighted to hear from you.