The Chancellor, George Osborne, delivered his Autumn Statement and Spending Review to the House of Commons on Wednesday 25 November. Given the recent furore surrounding his planned, but defeated, tax credit cuts (leading to his announcement in the Statement that such plans would be scrapped), there was expectation amongst the profession that he would target "unprotected" taxes such as inheritance tax ("IHT"), capital gains tax ("CGT") and stamp duty, to make up for the anticipated savings he hoped to achieve. There were no announced reforms to IHT or CGT, to the relief of many, but stamp duty land tax was not similarly spared, with a hike which will affect buy to let landlords and second-home owners.

The main announcements for our private clients are below.

Stamp Duty Land Tax

Higher rates of stamp duty land tax ("SDLT") will be charged from 1 April 2016 on purchases of "additional" residential properties above £40,000 such as buy to lets and second homes. Those with only one property will be unaffected and will continue to pay SDLT at current rates.

The higher rate will be 3% above current rates, at every band, taking the top rate band to 15% for properties above £1.5 million.

The measure is intended as a disincentive to purchase an additional property, thereby helping first-time buyers on to the property ladder, but commentators have noted that it could have the opposite effect between now and April 2016 when affected buyers could flood the market with the aim of purchasing whilst the current SDLT rates are in force. Further, the increase in tax for buy to let investors is likely to reduce the availability of properties for rent, which could lead to an increase in rents for those unwilling or unable to buy their own properties.

The announcement will affect UK domiciliaries who are living and working abroad but who wish to retain a property in the UK to be close to family, as the higher rates of SDLT will apply to any "second home" purchased in the UK.

A further hit to buy to let landlords and second home owners who are selling, came in the announcement that, from April 2019, payment on account of CGT for residential property will be required within 30 days of completion, instead of by 31 January in the tax year following the sale. Those with a single property who can claim "principal private residence relief" will be unaffected.

IHT and Deeds of Variation

On a more positive note, there was the welcome announcement that the Government will not introduce a restriction on how deeds of variation can be used for tax purposes. Deeds of variation allow a beneficiary to redirect the inheritance they are entitled to under a Will or on intestacy without IHT or CGT consequences. HMRC had launched a review of the use of deeds of variation on 15 July 2015, with the implication that reforms could follow.

Digital Revolution

The government will invest £1.3 billion in making the tax system digital, replacing paper tax returns with digital accounts. From April 2018, most businesses, including companies, sole traders, self-employed people, partnerships and landlords, will be expected to file a digital tax return four times a year (as oppose to the single filing required currently), making use of free apps made available by HMRC and HMRC's website. The government will consult on the details in 2016, but this will be a major change to tax administration and the extra filing obligations are unlikely to be popular.


Not part of the Chancellor's speech, but within the text of the Autumn Statement document is a little announcement that could have an important impact for executors and beneficiaries of deceased estates. The ISA wrapper, which brings tax advantages above a "normal" investment, will be permitted to continue after death and during the administration period of a deceased's estate, thereby allowing the estate and the ultimate beneficiary to benefit from these tax savings. Currently, the ISA wrapper is removed on death.

Tax Avoidance

No Autumn Statement or Budget would be complete without a host of measures designed to counter tax avoidance and evasion, and the Chancellor did not disappoint. £800 million will be given to HMRC to fund additional work in tackling evasion and non-compliance in the tax system by 2020-21 and the "General Anti-Abuse Rule" ("GAAR") will be strengthened by the introduction of a new penalty of 60% of tax due for GAAR-caught tax avoidance schemes. There will also be a consultation on additional requirements for individuals with offshore assets to correct any past offshore non-compliance, with new penalties for failing to do so.


After the Summer Budget, which contained far-reaching proposals affecting the taxation of non-domicilaries, it was perhaps unsurprising (but not a foregone conclusion) that George Osborne largely left this class alone in this Autumn Statement. However we await the government's response to its consultation (recently closed) on its planned reforms to the taxation of non-domiciliaries, and the consultation on new rules for UK residential property held indirectly by foreign domiciliaries, and whether there will be any backward movement in the proposed implantation date of April 2017.

Draft legislation on the Autumn Statement measures not subject to consultation will be published on 9 December in Finance Bill 2016.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.