Archived article: This article was correct at the time of publishing. Tax, investments and pension rules can change over time so the information below may not be current.

Our view on the Autumn Statement 2014

With a General Election in May we were all expecting a Statement with one eye firmly on the polls. There were no surprises from the Chancellor this time, reflecting that the money is just not there to give away. Importantly there was no negative news for investors with marginal increases in ISA allowances and further confirmation that the pension reforms will continue as planned. And there was good news for most with the reform of Stamp Duty.

This is a short summary of the key announcements that may affect you and your personal finances. Please note that we can expect more detail in the coming days.


Investment & savings


ISAs have long been the Government’s preferred means of helping people save for their future.  We have seen an increase in the annual allowance from £7,200 in 2009/10 up to £15,000 in the current tax year and the allowance is being extended further from April 2015:

  • Stocks and Shares ISA - £15,240
  • Cash ISA - £15,240
  • Junior ISA - £4,080
  • Child Trust Fund (CTF) - £4,080

Historically, when a surviving spouse or civil partner inherited ISAs from a deceased partner, the inherited savings lost their ISA status and became taxable investments.  ISAs will now keep their tax-enhanced status when passed to a spouse or civil partner on death.

It is expected that Child Trust Funds will be able to transfer to Junior ISAs from April 2015 but regulations are still awaited.

The Treasury has also stated that it will begin a consultation into whether peer-to-peer lending (known as P2P, or ‘crowdfunding’) should be eligible for holding within an ISA.

Venture Capital Trusts (VCTs)

Somewhat vaguely the Chancellor announced that VCT relief will not be available to companies ‘substantially benefiting’ from other Government support for the generation of renewable energy. This could mean companies receiving subsidies under some of the government schemes promoting these new technologies may be exempt from providing investors with venture capital tax relief in the future. We are actively seeking clarification.

Pensioner Bonds

As announced previously, National Savings & Investments will launch two new Pensioner Bonds in January 2015 which will be open to people over 65. The interest rates on these products will be confirmed on 12 December 2014 with 1 year and 3 year terms. It is expected that up to £10 billion of these bonds will be issued and that a maximum of £10,000 can be saved in each bond.


From April 2015, beneficiaries of individuals who die under the age of 75 with remaining uncrystallised or drawdown defined contribution pension funds, or with a joint life or guaranteed term annuity, will be able to receive any future payments from such policies tax free where no payments have been made to the beneficiary before 6 April 2015. The tax rules will also be changed to allow joint life annuities to be paid to any beneficiary. Where the individual was over 75, the beneficiary will pay the marginal rate of Income Tax, or 45% if the funds are taken as a lump sum payment. Lump sum payments will be charged at the beneficiary’s marginal rate from 2016-17.

State Pension

The basic State pension will move to a flat rate from April 2016 and for those with a full State pension, the minimum amount will be £151.25 per week (£7,865 p) with the actual figure to be set in autumn 2015.


Income Tax

The following table shows the changes in Personal Allowance, Basic Rate and Higher Rate thresholds during the current Parliament. The 2015/16 Personal Allowance was due to increase from £10,000 to £10,500 but will now increase to £10,600 and the higher-rate threshold increases in line with inflation for the first time in five years.








Personal Allowance







Basic Rate Limit







Higher Rate Threshold








Stamp Duty on homes

Stamp Duty on residential property is being reformed and a new tiered basis will apply from 4 December 2014. The new regime replaces the current ‘slab’ regime which can create market distortions. For example, many properties are sold at £250,000, where Duty is currently paid at a rate of 1% (£2,500) whereas they are seldom sold for £251,000 which would attract a 3% rate (£7,530).

The new rates will apply as follows:

Property value

Tax rate on each progressive band

£0 - £125,000


£125,001 - £250,000


£250,001 - £925,000


£925,001 - £1,500,000


£1,500,000 plus



In Scotland, after 31 March 2015, the Scottish Government’s Land and Buildings Transaction Tax will replace SDLT.

Inheritance Tax

The expected single settlement nil-rate band for trusts will not be introduced but new rules to target avoidance through the use of multiple trusts will be set.

The Government will extend some of the Inheritance Tax exemptions to show its appreciation to emergency services personnel, humanitarian aid workers and those awarded for valour or gallantry.

Read our macro comment on the Autumn Statement from Ben Seager-Scott, Director of our Investment Office.

The above article is based on our interpretation of the 2014 Autumn Statement and related legislation; it is not intended as advice, and the impact of any changes to tax rates or allowances will depend on your personal circumstances.

The value of investments, and the income derived from them, can go down as well as up and you can get back less than you originally invested. Past performance is not an indication of future performance.

Venture Capital Trusts are complex, higher risk investments and are NOT suitable for all investors. They are only suitable for UK resident taxpayers who can tolerate higher risk and have a time horizon greater than five years. VCTs invest in unquoted businesses, they can be illiquid and management costs can be high.