Conservative Party conference: key points from the Chancellor’s speech

The Chancellor of the Exchequer announced yesterday a raft of new proposals at the Conservative party conference. Some of these proposals will be introduced before the general election next year.

Some of the tax specific proposals announced include:

  • Abolition of the provisions that levies a 55% tax charge on pension pots when the pension holder dies.  These new proposals will apply to defined contribution (DC) pension scheme holders and will allow the pension holder to transfer their remaining DC pension without a tax charge as long as it is paid out as lump sums or taken through a flexi access drawdown account. This does not apply to annuities or scheme pensions. Further information can be found on HM Treasury’s weblink below:
    https://www.gov.uk/government/news/chancellor-abolishes-55-tax-on-pension-funds-at-death
  • DC pension members that die aged over 75 will be able to transfer their pension as a lump sum which is subject to a 45% tax charge. The Government intends to make such lump-sum payments subject to tax at the marginal rate (not a flat rate charge of 45%) and will consult the pension industry in order to implement this by 2016-17. Further information can be found on HM Treasury’s weblink below:
    https://www.gov.uk/government/news/chancellor-abolishes-55-tax-on-pension-funds-at-death
  • Pledge to clampdown on tax avoiders, in particular targeting technology companies.

Other proposals announced include:

  • A benefits freeze for people of working age for two years.
  • The benefits cap will be reduced to £23,000 per year.
  • Housing benefit will be reformed.
  • Jobseekers allowance (JSA) will be replaced.
  • New powers will be given to the Bank of England to prevent property booms and to ensure mortgages are only given to those who can afford them.
  • Three million new apprenticeships will be created.
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