Change continues despite cancelling the UK’s autumn budget

John Williams, head of wealth planning, highlights how UK government changes that impact family finances are continuing despite the Autumn Budget being scrapped for a second year.
Published 29 September
6 mins
For the second year in a row, the government has scrapped the annual Autumn Budget scheduled for November.

Last year, the cancellation was due to the UK General Election. This year, the government has replaced it with its Winter Economy Plan as stricter controls on life in England are imposed due to rising number of COVID-19 cases, with similar rules being rolled out by the devolved parliaments.


In its statement, the Treasury flagged: “Now is not the right time to outline long-term plans – people want to see us focused on the here and now. So we are confirming today that there will be no Budget this autumn.”

However, it does not mean that the government has stopped preparing to make changes to legislation that will affect individuals across the country. We flag two potential changes to capital gains and inheritance taxes and one amendment to private pensions that’s already been implemented, and that you should be aware of.


It is also worth mentioning that while Nedbank Private Wealth does not provide individual tax advice, we can work in conjunction with your legal or tax advisers to ensure your investments are structured in the most efficient manner in line with your financial goals and objectives.

1. Capital Gains Tax

In a recent article, The Deep Divides in Perceptions of Wealth, we flagged that the review of capital gains tax (CGT) by the Office for Tax Simplification (OTS) could pave the way for changes. And these may come to pass given the need to increase the Treasury’s revenue and pay down government debt – the scale of which is set to rise even further following the Winter Economy Plan announcements.

CGT is currently payable at different levels depending on the type of investment transaction as per this table1.



Residential property

All other chargeable assets

UK individual paying basic rate income tax




UK individual paying higher or additional rate income tax







As is suggested by the name of the department reviewing the changes, the OTS could  look to simplify CGT given the many complexities and exemptions which currently apply, e.g. you have to pay CGT on personal possessions (i.e. chattels), but only if they are sold for more than a £6,000 profit1. Meanwhile, CGT does not apply to possessions known as ‘wasting chattels’, which include cars – as well as the classic category – and vintage wine.


There is also what can be seen as an entirely reasonable view that CGT would be simplified if it is brought into line with income tax levels, although there is a concern this may reduce the incentive to invest over the longer term.

As part of the process, the OTS conducts a consultation. Once that closes, the OTS will then analyse the responses and publish its main recommendations, initially in November 2020, with more to follow in early 2021, which will then be used by the Chancellor in his deliberations.


What is important to note is that the scope of this review is very broad. It requires the OTS to consider tax rates, annual allowances and reliefs – a level of detail unusual for an OTS review and which many have taken as a sign that the Chancellor is actively considering significant reform to CGT. Having said that, any announcement, particularly for property gains, may be postponed given these could damage any economic growth encouraged by the property tax relief available on the first £500,000 in England and Northern Ireland, or the first £250,000 in Scotland and Wales, until 31 March 2021.

2. Inheritance tax

Everyone has a ‘nil-rate band’, i.e. an allowance of £325,000 that they can pass on tax free when they die.


There is also an extra allowance in the ‘residence nil-rate band’ (RNRB)1. However, this only applies to a residence you have lived in and can only be used when the property is passed to a direct descendant, i.e. children, grandchildren and stepchildren. It is also just available on estates that include a property. April 2021 saw the level of the RNRB increase to £175,000 per person, which potentially means a married couple (or those in a civil partnership) can pass on £1 million tax free.


Any unused allowances can be transferred to the surviving partner (known as the transferable nil-rate band). And UK-domiciled spouses or civil partners also receive any assets gifted by their significant other, without a limit in value, without having to pay inheritance tax (IHT).


However, there are some important restrictions with regard to the RNRB aside from cousins, nephews and nieces being excluded. For every £2 your estate exceeds the £2 million threshold, the RNRB is reduced by £1. So if your estate is worth £2.35 million in the 2020-21 tax year, you’ll lose the entire RNRB.

What is also critical to note is that the £2 million threshold ignores other exemptions and reliefs, i.e. not including the agricultural and business property relief may push an estate over £2 million even though some of the assets might not be subject to IHT.


And there are other IHT complexities that should be considered, e.g. if the receiving spouse or civil partner is not domiciled in the UK , then they can only receive up to £325,000 free of IHT, unless they elect to ‘opt in’ and be treated as UK domiciled for IHT purposes.


Meanwhile, although the Chancellor decided not to implement any of the recommendations from the OTS 2019 review, these may be back on the table given the increasing need to repay the ever increasing government debt, and also because the 2019/20 tax year receipts fell for the first time in a decade1, dropping by £223 million.

3. Private pensions

From 5 October 2020, the UK state pension age increases to 661. However, access to private pensions remains at 55. And, given the planned delays in people reaching the state pension age, this would have meant an ever increasing gap between the age at which individuals are able to draw their private pensions before becoming eligible for a state pension.


On 7 September 2020, however, it was announced that the gap will return to the original 10 years in 2028. From that year, access to private pensions will be allowed when you are 57 and at the same time the state pension age will rise to 67.


Although people have an eight-year timeline to adjust their plans, it is advisable to review your pension arrangements now to ensure you are still on track to meet your objectives. While pension freedoms have been generally welcomed, the system remains overly complex, with many potential pitfalls, which can lead to an unwelcome and unexpected tax charge when you get to retirement, or potentially earlier.

While pension contributions are restricted in line with the annual allowance, there is currently the opportunity to ‘carry forward’ any unused allowance from the previous three tax years.


However, many of the other tax allowances are in the category of use it or lose it.


As such, it is always advisable to review your finances to ensure you are maximising your allowances and reliefs where applicable – whether it is to help you and your future finances, ensure you and your spouse or civil partner benefit from your joint wealth, and/or pave the way for future generations to benefit.


Just get in touch.

Clients of Nedbank Private Wealth can get in touch with their private banker directly to understand how wealth planning can help them achieve their financial goals and objectives, or call +44 (0)1624 645000 to speak to our client services team.


If you would like to find out more about how we can help you with wealth planning support, please contact us on the same number as above, or complete the contact us form using the link below.

Sources: (1) UK Government.


Any examples of investments and structures used are for illustrative purposes only. The inclusion does not constitute an invitation or inducement to buy any financial investment or service. None of the content constitutes advice or a personal recommendation. Individuals should seek professional advice, based on their jurisdiction and personal circumstances, before making any financial decision.

about the author

John Williams

John Williams

John heads up the wealth planning proposition for the international business. He works with clients and their families, in tandem with their professional advisers, to ensure they have a clear financial plan in place to achieve their financial objectives. Working in partnership with our teams of private bankers, he integrates the benefits of wealth planning alongside our broader wealth management and wealth structuring capabilities.


John has over 25 years of advisory and management experience, working for global organisations providing solutions to a wide variety of UK and international clients. He joined from Credit Suisse UK where he was head of wealth planning for five years. He has also held similar senior roles at Barclays and UBS.

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