SortMoney Personal Finance: News with views 07 Dec

Some good news for squeezed middle. Boy I love elections!

With exactly 6 months to go to elections it is no wonder the Autumn statement is friendly to squeezed middle who are the wavering voters.

We have suffered the worst since last recession and we deserve some break. Even if it comes from Government with one eye on upcoming elections.

Hera are 6 articles which will tell you all the important stuff about the Autumn statement and how it may impact you.

Chart showing UK position in G7

UK is the fastest growing economy in G7
First off we have the news that according to IMF, UK has the fastest growing economy in G7. With global fund predicting that UK will grow 3.2% in 2014 and 2.7% in 2015.

While this is good news our salaries are yet to see the benefit of this growth and rapidly increasing house prices represent a future risk to the economy’s health.

Stamp Duty Rate

Fairer & lower stamp duty on property purchases
UK stamp duty structure has been unfair for a very long period of time. The abrupt increase in rates, applicable to the whole purchase amount, when certain thresholds were hit was clearly unfair.

Thankfully this has now been moved to a structure similar to income tax rates. This means that 98% of people would now pay lower tax on purchase of a home.

The only people who pay more would be those buying houses valued at more than £937,000.

Children exempted from air duty in economy flights
Effective immediately children under 12, and from next year children under 16 will pay no air duty. This could save an average family of four £26 on flight to Europe and £142 on flight to USA.

Raising revenue from children’s holidays was never a good idea in first place and has thankfully been repealed.

Next Government should go ahead and abolish air duty completely. We pay enough tax as it is.

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Currently if someone passes away, they can’t pass on their ISA to their spouse, even if they have saved the money together.

Now if an ISA holder dies, they will be able to pass on their ISA benefits to their spouse or civil partner via an additional ISA allowance.

The surviving spouse or civil partner will be allowed to invest as much into their own ISA as their spouse used to have, in addition to their normal annual ISA limit.

Further any pension annuity income can be passed on to surviving partner income tax free in case of someone passing away before the age of 75.

It is important to note that this only applies in case where marriage or civil partnership exists. We think that similar protection should be extended to those couples who choose not to make their relationship official by making a joint statement to the effect to HMRC.

Banks and multinationals doing aggressive tax avoidance to be targeted
A 25% tax to be levied on income from economic activity in UK for all companies even if their head-office is situated elsewhere.

Further banks can only offset half of their losses against future profits. This will bring forward their taxes, but overall will not increase their tax liability.

While not directly affecting us in short-term we applaud Government for this courageous move to raise revenue from large multinationals.

While OECD has been making similar noises for some time, once again UK has shown that it is not afraid to take a lead where necessary.

Finally Govt to invest in North to create a Northern powerhouse
New trains, investment in science and other measures unveiled to benefit North.

This is a highly welcome move.While London is UK’s economic hub, there is no reason that northern cities can not act as a joint supercity – building capability and proving welcoming home for world class businesses, thus easing pressure on congested London.

Weekly Personal Finance: News with Views

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Written by Rajkanwar batra