25 November 2015

Stephen Ford, Head of Wealth and Investment Management - commenting on the three per cent stamp duty increase on second homes and buy-to-let investments in today's Autumn Statement, said:

'After the additional tax measures announced in the July Budget, any buy-to-let investor who didn't understand the Governments desire to drive some of the capital invested in the investment property market back into the real economy got their final warning today. The additional three per cent stamp duty increase is expected to raise £880mn in total by 2021, and further reduce demand for these investments, putting downward pressure on prices. In addition CGT on investment properties will now need to be paid 30 days after sale which will further squeeze land-lords cash flow. People for whom buy-to-let investments represent a significant part of their portfolio could consider rebalancing their portfolios before these measures come into effect in April 2016 into more liquid and tax efficient investments, for example ISAs and pensions.'

'Our sense is that this may not deliver the revenue return which the Chancellor indicated he's seeking to fund other measures announced in the statement. In our view many investors with second homes will simply just sit tight. Whether this will liberate the market, only time will tell.'

Simon Blowey, Divisional Director, Financial Planning at Brewin Dolphin said

'Well the rolling stone of Budgets certainly gathers no moss. For the third time in 2015, with its usual pre-announcements, Osborne was master of the sound bite. Except this time he really enjoyed himself with quip, scorn, and, if not, a little gloating.

If the old adage that only an intelligent man can change his mind, Osborne's increasingly cerebral rating may have just advanced him-self closer to the Cameron throne.

So the big 'if' in the next few days will of course be, do the figures add up? We'll have to see if the repeal of the tax credit cuts, really allow for other freezes and giveaways.

After setting the hare running in the election run up, attacking Miliband's own use of Deed of Variation, Osborne has decided not restrict its use. Maybe a missed opportunity not to tidy up the application of the main residence additional Nil Rate Band, but one measure of post death planning that advisers, solicitors and clients alike, will applaud it's retention.

Osborne has been clever introducing the apprenticeship levy, in a reducing corporation tax environment. Let's be clear, it's a tax upon business, but one that business, the wider economy and UK Plc will ultimately benefit from. You'll find few detractors on this point as the wage bill would need to be over £3m pa to have an impact upon any business.

Whilst the share prices of house builders already enjoyed the typical pre-leaks of a Budget Day, the drive to provide greater affordable housing in both the rented and for sale sector, Osborne hopes the quid pro quo for a leg up on the housing ladder, will be a mark on the voting slip'.

-ENDS-

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