Autumn Statement - Main Issues

Income Tax and National Insurance

From 2014/15 a spouse/civil partner will be able to transfer £1,000 of his or her personal allowance to his or her spouse/civil partner.

Employer National Insurance Contributions for employees under the age of 21 are to be abolished from April 2015 (unless their annual earnings exceed the upper earnings limit, currently £42,285).

From April 2014 interest paid on a loan to invest in a close company/employee controlled company will be extended to investments in such companies resident throughout the European Economic Area.

Pensions and Savings

Individuals who contribute to pension schemes will have the ability to opt for individual protection of the life time allowance of £1.5 m rather than allow the reduction to £1.25m with effect from April 2014.

From 2014/15 the general ISA limit will increase to £11,880 whilst the junior ISA and Child Trust Fund limits are both increased to £3,840.

Following a review of the basis of calculation of the income drawdown rates, the government has decided that the withdrawal rates are a reasonable match to annuity rates and will not therefore change the basis on which its draw down tables are prepared.

Capital Gains Tax

The final 36 months ownership of a main residence is normally exempt from Capital Gains Tax. From April 2014 that period of exemption reduces to 18 months.

Non residents are currently able to dispose of any UK property they own without incurring a CGT liability. A consultation document is to be published to consider how this attractive exemption may be withdrawn from April 2015.

Employee Share Ownership

Three new reliefs are introduced to encourage greater employee share ownership:

  • Disposals of shares which result in a controlling interest in a company being held by an employee ownership trust are to be exempt from CGT
  • Providing certain conditions are met, transfers to employee ownership trusts are to be exempt from IHT
  • Bonuses of up to £3,600 per annum may be made to an employee of an indirectly owned company controlled by an employee ownership trust.

Inheritance Tax and Trusts

Filing and payment dates for IHT relevant property trust charges are to be simplified and new rules brought in for undistributed income when calculating the 10-year anniversary charge with effect from 2015.

There will be a consultation on proposals to split the IHT nil rate band available to trusts from 2015.

The range of trusts qualifying as Vulnerable Beneficiary Trusts will be extended from April 2014.  CGT uplift provisions are being extended with immediate effect and there will be a consultation of further reforms to the taxation of trusts for vulnerable people.

The ability to file IHT returns online will be provided during 2015/16.


There will be further consultation to allow more donations to attract Gift Aid, make Gift Aid declarations easier to understand and make more use of intermediaries to help operate Gift Aid.

The legislation for the Cultural Gifts Scheme is to be amended in relation to estate duty.

A series of reforms are to be made to Community Amateur Sports Clubs, as announced on 25 November 2013, including gifts by companies being eligible for corporate Gift Aid from April 2014.

A new IT system is to be developed to allow charities to make a joint registration with HMRC and the Charity Commission for England and Wales.

Finance Bill 2014 will clarify the availability of partial relief from SDLT where a charity and non-charity jointly purchase property.

Corporate Tax

Tax relief for corporate trading losses can be lost if (a) there is a change in the ownership of the company and a major change in the nature or conduct of the company’s trade or (b) there is a change in the ownership and within a three year period the scale of activities becomes small or negligible.  The government intends to ease these rules.

Corporation tax relief is to be made available at 25% for investment of the first £20m of qualifying production expenditure and 20% thereafter for small and large budget films from April 2014, subject to state aid clearance.


Changes are now expected to counter two tax reduction methods involving LLPs: the use of a corporate partner to take a share of profits taxed at a lower rate than individual partners and by introducing as partners individuals who would otherwise be employees.

Personal Tax

The practice of a non-UK  domiciliary having one employment contract for UK duties and another for overseas duties is to be curtailed by charging the employee on the total remuneration where the overseas remuneration is not subject to a comparable level of tax.

After the Budget 2013 there were concerns that changes might be introduced to the tax treatment of loans from close companies to individuals who have a share or interest in them. The government has for the moment not decided to make any such changes.

Measures are to be introduced with effect from April 2014 to prevent employment intermediaries being used to avoid employment taxes by disguising employment as self employment.

Business Tax

Changes are proposed to simplify the scheme which provides the business premises renovation allowance.

The above points have been taken from the Autumn Statement published on 5th December 2013 by HM Treasury.  They do not amount to changes in the law, but are an indicator that the law is likely to be changed along these lines.  We suggest that before taking any action in response to any of these points, you consult first with a partner in the firm.

6 December 2013

The information in this article is believed to be factually correct at the time of writing and publication, but is not intended to constitute advice.  No liability is accepted for any loss howsoever arising as a result of the contents of this article. Specific advice should be sought before entering into, or refraining from entering into any transaction.