Investor Event

The Chancellor’s Autumn Statement – What’s in it for investors?

This blog gives you the latest topical news plus some informal comments on them from ShareSoc’s directors and other contributors. These are the personal comments of the authors and not necessarily the considered views of ShareSoc. The writers may hold shares in the companies mentioned. You can add your own comments on the blog posts, but note that ShareSoc reserves the right to remove or edit comments where they are inappropriate or defamatory.

You may well be worse off if you are dead. The Government is to clamp down on the payment of state pensions to people who are dead, which is apparently a particular problem when they move overseas upon retirement.

Otherwise these are come of the changes and how they may affect individual investors:

– As expected, there is to be a restriction on Venture Capital Trust (VCT) “enhanced share buy-backs” upon which there was a recent consultation. In future VCT investments that are conditionally linked in any way to a VCT buy-back or that have been made within 6 months of a disposal of shares in the same VCT, will not qualify for new tax relief. This is going to be tricky for some investors and VCT taxation is already complex enough, so ShareSoc would have preferred a less strict rule.

– There will be a new tax relief for equity and certain debt investments in social enterprises. Charities, community interest companies or community benefit societies will be eligible.

– The permitted maximum level of ISA subscriptions will be £11,880 in 2014-15, which is an increase in line with CPI. No mention of imposing an overall limit as was rumoured.

– There are several attacks on “tax avoidance” with new capital gains taxes where non-residents dispose of UK residential properties, on those who use intermediary companies to appear as if self-employed when they are in fact employed (as the IR35 rules are already in place it is unclear what else is being contemplated here), and on structures used by hedge fund managers and investment bankers to minimise tax.

– The basic personal allowance is to rise to £10,000, but the age allowances for those born before April 1948 are frozen. The age at which you are elligible for a state pension is also likely to rise as the Government is reviewing this and it may rise to 69 for people in their early thirties.

– There is encouragement for fracking and for the development of offshore oil and gas fields.

– Another change to VCTs is that the VCT rules will be changed so that “investors can subscribe for VCT shares via nominees”. This is surely a retrograde step as some VCTs have in the past demonstrated major corporate governance problems (ShareSoc ran a campaign on one of them and there have been other cases in the past where shareholders instigated “revolutions” and changes of management). Allowing nominees will make these kinds of campaigns a lot more difficult and this is a retrograde step surely that has been ill considered. ShareSoc is always opposed to the extension of the use of nominee accounts.

But perhaps the best news was that Mr Osborne was more positive about the health of the economy and projections for future budget deficits. But this budget is in essence fiscally neutral so any giveaways may only come before the next general election.

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