Inheritance tax (IHT)
There was no change to the Inheritance tax threshold of £325,000, which was frozen until 2017-18 in the 2013 budget.
The Government confirmed the extension of the IHT exemption for armed forces personnel who die on active service to all emergency services and humanitarian aid workers who die in the line of duty, or whose death is hastened by injury incurred in the line of duty. It will have effect for deaths on or after 19 March 2014.
Stamp Duty (SDLT – stamp duty land tax) – changes in the Autumn Statement
Prior to the Autumn Statement (on 3 December 2014), SDLT was charged on the whole purchase price at a flat rate dependent on the price paid. So, if you bought a house for £250,000, your stamp duty rate was 1% – ie £2,500. Increase that to £250,001 and your rate leapt to 3% on the whole amount – ie £7,500.03. That extra £1 paid for the property cost a whopping £5,000 in tax.
From 3 December 2014, the tax is charged on the marginal purchase price only, at the following rates:
So, if you buy a property at £250,001, you will pay nothing on the first £125,000, 2% on the next £125,000 and then 3% on the extra £1 – a total of £2,500.03 – a hole lot better than £7,500!
The Chancellor said that 98% of house sales will attract less SDLT as a result of these changes.
This summary is published for the information of clients. It provides only an overview of the main proposals announced by the Chancellor of the Exchequer in his Budget Statement, and no action should be taken without consulting the detailed legislation or seeking professional advice.