The inheritance tax nil rate band will increase by 1% in 2015-16 to £329,000. The nil rate band has been frozen at £325,000 since 2009. Finance Act 2012 provides that the nil rate band is to rise in line with the consumer prices index (CPI) for the purposes of chargeable transfers made on or after 6 April 2015, as announced in the 2011 Budget (see Private client tax legislation tracker 2011-12: IHT: CPI indexation of nil rate band). However, automatic indexation of the nil rate band each year, using the CPI over the year to the previous September, may be overridden for a tax year if Parliament sets a different figure. For IHT rates and limits, see Practice note, Tax data: inheritance tax.

(See HM Treasury: Autumn Statement 2012, paragraph 1.162.)

The capital gains tax (CGT) annual exempt amount (AEA) will increase by 1% to:

The government is increasing a number of tax thresholds by 1% in parallel with its decision to limit increases in benefits to 1%, including the IHT nil rate band and the higher rate threshold for income tax (see IHT nil rate band to increase in 2015-16 and Income tax rates and thresholds for 2013-14).

The AEA is indexed to the CPI from 1 April 2013 unless the government overrides this, as in this announcement. For more information, see Practice note, Tax data: capital gains tax: Annual exempt amount.

(See HM Treasury: Autumn Statement 2012, paragraph 1.162.)

The Chancellor announced that the personal allowance for those born after 6 April 1948 would increase (by £1,335) to £9,440 and the basic rate limit would be set at £32,010 for 2013-14.

This represents an additional increase of £235 over the increase to the personal allowance announced by the Chancellor in the 2012 Budget (£9,205) and an equal increase in the reduction to the basic rate limit also announced in the 2012 Budget (£32,245). Accordingly, in 2013-14, higher rate taxpayers who benefit from the personal allowance will see a small benefit compared with 2012-13.

The Chancellor also announced that for each of tax years 2014-15 and 2015-16, the basic rate limit will increase by 1% rather than by inflation.

The Chancellor made clear in his speech that he had no intention of going back on the commitment to reduce the 50% additional rate of income tax to 45% (see Legal update, 2012 Budget: key private client tax announcements: 50% tax rate to reduce to 45% in April 2013). He stated that "punitive tax rates do nothing to raise money, and simply discourage enterprise and investment in Britain", while noting that tax revenues from the rich fell by £7 billion in the first full year of the 50% rate.

For current income tax rates and limits, see Practice note, Tax data: income tax.

(See HM Treasury: Autumn Statement 2012, paragraphs 1.141 and 1.143 to 1.145, HM Treasury: Autumn Statement 2012: The Chancellor's speech and HMRC: Tables confirming tax and tax credit rates and thresholds for 2013-14).

The Chancellor announced that the government would reduce the amount of tax relief available for pensions saving by cutting both the annual allowance and the lifetime allowance available for active members of registered pension schemes:

The measures will be included in the Finance Bill 2013, which will be published in draft on 11 December 2012.

HMRC estimates that 98% of individuals currently approaching retirement have a pension pot worth less than £1.25 million and that 99% of pension savers make annual contributions below £40,000, with the average person contributing around £6,000 a year.

The government will also increase the capped drawdown limit for pensioners of all ages from 100% to 120% of the value of an equivalent annuity. It is not clear whether this will also be effective from 2014-15.

For tax limits relating to pensions, see Practice note, Tax data: registered pension schemes.

(See HM Treasury: Autumn Statement 2012, paragraphs 1.179, 1.180, and 2.57 and 2.58 and HMRC: Autumn Statement, 5 December 2012: Pensions savings: tax relief.)

The 2012 Autumn Statement confirms the introduction of a new employee shareholder employment status with effect from April 2013 (originally the new status was referred to as "employee owner"). Individuals will receive capital gains tax (CGT) exempt shares in their employer worth at least £2,000, in exchange for agreeing to become employee shareholders (and with no other consideration permitted). Employee shareholders will not have certain employment protections and rights normally enjoyed by employees.

The government indicated that it was considering ways to reduce income tax and NICs on the acquisition of shares by employee shareholders on 3 December 2012. The 2012 Autumn Statement gives a little more information about this, stating that one option under consideration is for the employee shareholder legislation to deem that an employee shareholder pays £2,000 for their employee shareholder shares, for income tax and NICs purposes, with the result that "the first £2,000 of shares received under the new status would be free from income tax and NICs".

The possibility of income tax and NICs liabilities on acquisition of employee shareholder shares has always been a key concern about the practicality of the proposed new employment status. The government's latest proposal would eliminate income tax liabilities on acquisition for employee shareholders receiving the minimum value of employee shareholder shares (assuming that there is no joint election to tax the unrestricted value of the shares when acquired, if they are restricted securities). However, it would also confirm an income tax liability for employee shareholders who acquire shares worth more than £2,000 (with tax payable through PAYE and NICs liabilities due, if the shares are readily convertible assets).

We expect draft clauses for Finance Bill 2013 implementing the employee shareholder CGT exemption to be published on 11 December 2012. To follow future developments, see Practice note, Private client tax legislation tracker 2012-13: Employee shareholders.

For more information about the employee shareholder proposals, see Legal update, Government response to consultation on employee owner status. For a discussion of the original uncertainties and issues about the tax treatment of the acquisition of employee shareholder shares, see Ask the team: What do you make of the employee shareholder (employee owner) proposals?: Income tax liabilities in respect of shares?. For more information about restricted securities, see Practice note, Restricted securities.

(See HM Treasury: Autumn Statement 2012, paragraphs 1.122, 2.55 and 2.56.)

As announced in the 2012 Budget, previously unlimited income tax reliefs will be capped at the higher of £50,000 or 25% of an individual's income. Charity reliefs will not be capped.

A consultation on the cap closed on 5 October 2012 and draft legislation is expected on 11 December 2012 for inclusion in the Finance Bill 2013 (see Legal update, Consultation on capping income tax reliefs launched (detailed update)). The exclusion of charity reliefs was confirmed in June 2012 following a government U-turn (see Legal update, U-turn on capping charity income tax reliefs confirmed). To follow further developments, see Private client tax legislation tracker 2012-13: Income tax: capping reliefs.

(See HM Treasury: Autumn Statement 2012, paragraph 2.51.)

At the time of the 2012 Budget, the Chancellor announced that he would be going ahead with a further consultation on the operational integration of income tax and national insurance contributions (NICs) (see Legal update, 2012 Budget: key business tax announcements: Income tax and NICs reform). He has now confirmed that the government will wait for further progress on planned operational change to the tax system (by which we assume he is referring to the introduction of real time information accounting for PAYE) before consulting formally on the integration of income tax and NICs. This is in accordance with the provisional timetable set out in the November 2011 consultation, which foresaw consultation on draft legislation in 2013-15 and implementation of a reformed system in 2017 (see Legal update, Government plans for integration of income tax and NICs and simpler personal taxation).

(See HM Treasury: Autumn Statement 2012, paragraph 2.52.)

The Chancellor announced that the government:

This appears to rule out a new "mansion tax" as championed by the Liberal Democrats. However, we expect draft legislation to be published next "to stop the richest avoiding stamp duty". This is presumably a reference to the proposed annual charge for high value residential property owed by non-natural persons (see Legal update, Enveloping high-value residential property: consultation on annual charge and extending CGT to non-residents).

(See HM Treasury: Autumn Statement 2012: The Chancellor's speech.)

The annual subscription limit for individual savings accounts (ISAs) for 2013-14 will be £11,520. For information about current limits, see PLC Private client, Tax data: individual savings accounts: Annual subscription limits.

(See HM Treasury: Tables confirming tax and tax credit rates and thresholds for 2013-14.)

The government has confirmed that it will be looking to enter into enhanced tax information sharing agreements with other jurisdictions in a form similar to the agreement that it concluded with the US in September 2012 implementing the US Foreign Account Tax Compliance Act (FATCA) (as to which, see Legal update, UK and US sign agreement to implement FATCA). The confirmation in the 2012 Autumn Statement mirrors that contained in announcements made on 3 December 2012 by HM Treasury and HMRC (see Legal update, Treasury and HMRC outline approach to tackling tax evasion).

To follow progress on the implementation of the UK-US FATCA agreement, see Private client tax legislation tracker 2012-13: FATCA: information powers. For links to further PLC content on FATCA, see Practice note, A guide to PLC's FATCA resources.

(See HM Treasury: Autumn Statement 2012, paragraph 1.174.)

The government has announced that it will examine whether the administration of Gift Aid could be improved to reflect new ways of giving money to charity, in particular digital giving.

For detailed guidance on Gift Aid, see Practice note, Gift Aid for individuals, sole traders and partnerships: overview and, in particular, Donations must be of money.

(See HM Treasury: Autumn Statement 2012, paragraph 2.54.)

The government has announced that HMRC will be setting up a new centre of excellence, staffed by experts, to tackle offshore tax evasion and generally build up its offshore capability. The government confirmed that an additional £77 million would be invested in HMRC to allow it to accelerate the resolution of long-standing avoidance schemes (including schemes involving the use of partnership losses). The extra injection of funds will also enable HMRC to expand its Affluent Unit to deal more effectively with taxpayers with net worth of over £1 million, increase specialist resources to tackle offshore evasion and avoidance of inheritance tax (through the use of offshore trusts, bank accounts and other entities) and improve its risk assessment technology. HMRC aims to use the extra funds to help it make better use of data to identify tax evaders and to review its investigatory powers in this area. The confirmation in the 2012 Autumn Statement mirrors some of the announcements made on 3 December 2012 by HM Treasury and HMRC (see Legal update, Treasury and HMRC outline approach to tackling tax evasion).

The government is also to undertake an internal review of the extent to which offshore intermediaries are used to avoid tax and NICs, and will provide an update in the 2013 Budget.

(See HM Treasury: Autumn Statement 2012, paragraphs 1.175, 1.176, 1.178, 2.104 and 2.109.)

The government has confirmed that it will introduce a general anti-abuse rule (GAAR), and that guidance and draft legislation will be published later in December 2012.

The government first announced that it would consider introducing a legislative general anti-avoidance rule in the June 2010 Budget and a study group led by Graham Aaronson QC was subsequently established. The study group published its final report in November 2011, recommending the introduction of a targeted GAAR. The government announced as part of the 2012 Budget that it accepted the recommendations and duly launched a consultation that took place over summer 2012. For further detail, see Private client tax legislation tracker 2012-13: General anti-abuse rule (GAAR).

(See HM Treasury: Autumn Statement 2012, paragraph 1.178.)

The government has announced that it will consult on extending the disclosure of tax avoidance schemes (DOTAS) regime to include significant new information disclosure and penalty powers. For further detail on the regime, see Practice note, Disclosure of tax avoidance schemes under DOTAS: direct tax.

This confirms the statement made by HM Treasury on 3 December 2012 as part of a series of measures designed to tackle tax avoidance and evasion (see further Legal update, Treasury and HMRC outline approach to tackling tax evasion). These proposals supplement the measures contained in a government consultation launched in July 2012 also intended to extend the DOTAS regime (see Legal update, Tax avoidance consultation launched (detailed update).

(See HM Treasury: Autumn Statement 2012, paragraph 1.178.)

HMRC will significantly expand its online services to taxpayers over the next three years. Taxpayers in self-assessment will be able to carry out all tax transactions online. There are no further details at present.

(See HM Treasury: Autumn Statement 2012, paragraphs 1.138 and 2.155.)