The Autumn Statement for the Private Client Practitioner

The 2022 Autumn Statement delivered by Jeremy Hunt on 17 November 2022, setting out the government's "Medium-term Fiscal Plan", could have been considerably worse from a Private Client perspective, though it was never going to be an as catastrophic car crash as the mini budget of his predecessor in title was.

There was much speculation in the Press about CGT rates being aligned with income tax rates and the abolition of the free CGT uplift on death on all assets or, at least on any assets not charged to IHT. I was wondering how the latter might work and interact with CGT exemptions such as PPR relief …. But thankfully that headache has been spared us for another day.

Other than a graduated slashing of the annual CGT Annual Exemption, the lowering of the Income Tax Additional Rate threshold (what a spectacular Tory u-turn) and gradual reduction of the Dividend Allowance, most policies are aimed to collect tax revenue through fiscal drag as opposed to any changes to the current tax rules or rates.

So here is a summary of the key announcements for Private Client Practitioners:

Inheritance Tax

The inheritance tax nil rate band (NRB) and residence nil rate band (RNRB) thresholds which were already fixed at their current levels of £325,000 and £175,000 respectively until April 2026 (to then increase with the CPI) will be frozen at these levels until April 2028 i.e. for a further 2 years. The £2 million taper threshold above which the RNRB is gradually withdrawn will also remain frozen at its current level. The current IHT NRB has now been set at £325,000 since 6th April 2009. So almost 20 years will have passed by the time this may increase. By comparison, in the previous 20 years, the rise was from £118,000 in 1989 to £325,000 in 2009. A house worth £325,000 in April 2009 will, according to the Nationwide House Price Index, on a UK average, have gone up to £570,000 in April 2022 – so through fiscal drag (not allowing for the potential application of the RNRB) a tax increase of £98,000 on the same asset.

Income Tax

The income tax additional rate threshold will be reduced from £150,000 to £125,140 from April 2023. As the Personal Allowance is withdrawn by £1 for every £2 an individual earns above £100,000, this effectively means all income above £100,000 is taxed at the highest rates.

The dividend tax allowance will be reduced from £2,000 to £1,000 from April 2023 and to £500 from April 2024.

Capital Gains Tax 

The CGT annual exempt amount will be reduced from £12,300 to £6,000 from April 2023 and to £3,000 from April 2024. For Trustees this will reduce rates from 6,150 to £3,000 from April 2023 and to £1,500 from April 2024. No doubt this will mean a considerably higher number of small to medium sized Trusts will have to complete annual tax returns in order to report taxable gains. Currently many IIP Trusts on which all income is mandated will have no / minimal tax reporting obligations as gains are made within the current CGT Exemptions.  Having said that currently it is hard to make gains on any investments so this may be a bigger issue when fiscal markets recover, hopefully in the not too distant future.
With effect from 17th November 2022 shares in a non-UK incorporated company (which would be a close company if it were a UK company) acquired in exchange for shares in a UK incorporated close company will be deemed to be UK situs assets for the purposes of capital gains tax.

Cap on Care Costs

The introduction of a cap on care costs will be further postponed by 2 years until October 2025. The government originally published its plans for the future funding of care costs in Building Back Better: Our Plan for Health and Social Care on 7 September 2021 leading to the enactment of the Health and Care Act 2022 with the provisions relating to the cap on care costs due to be brought into force on 1 October 2023. The cynic in me wonders whether this will be pushed back indefinitely as it is difficult to see where the funding of this will realistically come from….


The increase SDLT thresholds have been made ‘temporary’ and will come to an end on 31st March 2025.  This effects the increase in the SDLT nil-rate threshold  for all purchases of residential property in England and Northern Ireland (from £125,000 to £250,000) and for residential purchases by first-time buyers (from £300,00 to £425,000) as well as the increase of the maximum purchase price to which first-time buyer relief applies (from £500,000 to £625,000).


The annual chargeable amount for ATED will be increased by the September CPI figure of 10.1% for the 2023-24 ATED charging period.


It was announced that the government will invest £79 million over the next five years to tackle more cases of serious tax fraud and compliance risks among wealthy taxpayers. Although I am fully on board with cracking down on tax fraud I wonder how effective this measure will turn out to be and whether the simple measure of retaining the submission of the IHT205 or requirement of professional submission of IHT forms would reduce tax losses (largely caused by innocence / ignorance rather than evasion / fraud) in a much more cost effective manner. 

Final Thoughts

All in all, a Budget that promised / threatened so much, but ended up being a bit of a damp squid. In fairness to Mr Hunt, he probably went as far as he could bearing in mind the previous mini budget and chaos caused by various other party members. Any further ventures into raising CGT or IHT would possibly have been the final straw for even the most hardened conservative supporters.

(Author: Claudia Roberts)