Business & Finance

Mountstone Partners Ltd


Mountstone Partners create and manage bespoke investment portfolios for wealthy families, charities and trusts.  CEO James Keen publishes a monthly investment update for their clients.

Here he summarises the key points from the Chancellor’s budget that he thinks will specifically have an impact on you as an investor, ranging from changes in pension legislation to ISAs to savings.  There’s a section covering fags, booze and gambling tax and apologies if all/any of these aren’t your thing.  He promises that he is not casting personal aspersions by including them!

Highlights of the budget include a major reduction in capital gains tax for all, which is great news.  We also saw the ISA regime for under 40s improved significantly.  Also there was no change to personal pension legislation, as promised.

 Personal taxation


 Higher-rate income tax threshold will rise from £42,385 to £45,000 in 2017/18 tax year

 Tax-free personal allowance to rise to £11,500 in 2017/18 tax year

 Capital Gains Tax to be cut from 28% to 20%, and from 18% to 10% for basic-rate taxpayers in 2016/17 tax year

 For the self-employed, by 2018, Class 2 National Insurance Contributions will be abolished altogether

 0.5% rise in insurance premium tax to 10%


Pensions and savings


 Annual ISA limit to rise from £15,240 to £20,000 in April 2017

 New “lifetime” ISA for the under-40s only in 2017/18 tax year, with a government contribution of £1 for every £4 saved up to a maximum of £5,000 (i.e government pays 20% or £1,000 max)

o This contribution will last up until age 50 and can only be withdrawn tax free after age 60

o Aimed at consumers who are buying a home or saving for retirement

o If withdrawn before the age of 60, the government bonus is lost and a charge of 5% will have to be paid on the remainder




 Headline rate of corporation tax – currently 20% – to fall to 17% by 2020

 Anti-tax avoidance and evasion measures to raise £12bn by 2020

 Personal service company tax loopholes will be closed

 Annual threshold for small business rates threshold to be raised from £6,000 to a maximum of £15,000, exempting 600,000 firms in 2017/18 tax year

 Supplementary charge for oil and gas producers to be halved from 20% to 10%

 Petroleum revenue tax to be “effectively abolished”

 £9bn to be raised by closing corporate tax loopholes and tax minimisation schemes

 Use of “personal service companies” by public sector employees to reduce tax liabilities to end

 Commercial stamp duty 0% rate on purchases up to £150,000, 2% on next £100,000 and 5% top rate above £250,000. New 2% rate for high-value leases with net present value above £5m. Effective from midnight


Alcohol, tobacco, gambling and fuel


 Fuel duty to be frozen for sixth year in a row
 Beer and cider duty to be frozen
 Duty on whisky and spirits also frozen. Duty on all other alcohol will rise in line with inflation
 Tax on cigarettes will rise by 2% above inflation
 Tax on hand rolling tobacco will rise by 3% above inflation
 There will be a new price floor for a packet of cigarettes


James-Keen Mountstone PartnersJames Keen, Director

Mountstone Partners Ltd

7 Henrietta Street



T: +44 (0) 203 617 9162

M: +44 (0) 7540 339 069



Wednesday, March 16th, 2016