The Good, The Bad & The Ugly - Autumn Statement 2014
Public opinion has played a strong role in the Chancellor's statement today and perhaps his announcements made at the Commons film set today can be summarised into the Good, the Bad and the Ugly.
The Good - Property Owners, Savers
At last the stamp duty system has been modernised, so it doesn't distort the property market with a more logical % being charged in each band rather than on the whole property price.
Savers can enjoy passing on their ISAs on death to their spouse who can continue to receive interest and dividends free of tax. With the higher cash threshold introduced recently, and previous years' build up of balances, the tax potentially saved will be very welcome.
Low and middle income earners enjoying a further £100 tax free personal allowance than previously announced or was that an excuse to repeat the Good news?
The Bad - Non-Doms, Google/Amazon etc.
These groups continue to be on the hit list. The charge a Non-Domiciled resident pays for the privilege of living here without paying tax on income kept abroad eg footballers will increase.
If Google/Amazon etc are found to have moved profits abroad, tax at 25%, higher than the normal 20% charge, will apply. This doesn't mean the UK will get 25% of what it thinks these profits are. It seems there's a lot to discuss before that happens.
The Ugly - Taking 'Too Much' Tax Relief
This isn't just about aggressive schemes, but now includes routine tax planning and use of reliefs when the government sees them becoming too successful or it's a good soundbite in an election year.
Sole traders when incorporating their business into a limited company have often enjoyed a good result all round from little capital gains tax on the sale to their company and the company getting tax relief on the amount paid to the owner. HMRC have presumably pointed out this is wrong and the Chancellor has agreed for all transactions effective from today.
Banks can't escape their past wrong doings and although restricting their losses to 50% when offsetting them against future profits sounds good now, I wonder what sort of precedent this sets for an arguably retrospective change because all companies have this expectation at the time they make the loss. Perhaps none of us, if the country's finances don't improve sufficiently, can rely on losses being offsettable in the future.