This change affects those who own life assurance policies, capital redemption policies and life annuity contracts. The rules for calculating the amount of gains from the relevant policies and contracts are amended. The changes apply where there have been gains earlier in the life of the policy or contract but the gains were not chargeable to tax under the income tax rules. The changes clarify the rules for calculating the amount of gains liable to income tax.
ISA annual allowance
The cash value of the ISA limit has increased from £10,680 in 2011/12 to £11,280 in 2012/13. Up to half of the allowance may be saved in cash.
Enterprise Incentive Schemes
The following changes for Enterprise Investment Schemes (EIS) and Venture Capital Trusts (VCTs) were confirmed today:
• The employee limit will rise from 50 to 250;
• The gross assets limit of £7m before investment and £8m after will increase to £15m before and £16m after;
• The maximum annual amount that can be invested in both schemes will increase from £2m to £5m.
The rules for EIS and VCTs will be simplified so that:
• There will be a relaxation in the rules defining when a person is connected to a company;
• The definition of qualifying shares will be widened;
• The £500 minimum investment threshold will be removed;
• The £1m investment limit by a VCT in a single company will be removed.
The changes to EIS will be effective on or after 6 April 2012 and the VCT changes on or after 1 April 2012.
The state pension will be reformed into a single tier pension. This will not take effect until after 2015.
State pension age
Consideration will be given to introducing a new mechanism for increasing the pension age in line with growing longevity.
Seed Enterprise Investment Scheme
The Seed Enterprise Investment Scheme (SEIS) is introduced from April 2012, as previously announced. This provides 50% tax relief and a capital gains tax holiday for investments in qualifying new companies.