Commenting on measures affecting building societies in the Budget today, Adrian Coles, Director-General of the BSA said;
STAMP DUTY
“The doubling of the stamp duty threshold will help alleviate pressure for first time buyers. But it is really time for a complete overhaul of this tax. The current ‘slab’ system means that you get big increases in tax once you jump over a threshold. It also means that there is an artificial grouping of sales just below each threshold. A graduated system would avoid this.”
ISAs
“The decision to keep current ISA limits for five years is very welcome. Cash ISAs have been especially popular with ordinary savers. This announcement gives some certainty for the medium term, which should encourage more people to invest.”
“With predictions that the election will be called very soon, it would be good to see a commitment from all of the main political parties to retain or preferably increase ISA limits well into the next decade.”
CHILD TRUST FUND PAYMENTS CONSULTATION
“A further payment into CTF the secondary years would be very sensible. Not only would it boost the fund, but it could also help prevent accounts from becoming dormant by reminding parents of their existence. It could also ignite young people’s interest in their fund and help them to think about their future finances.”
See Note to Editors for information on building societies offering CTF
MILES REVIEW
“The report by Professor Miles, published over a year ago, made a number of sensible suggestions to enable people to properly consider all they need to when buying a home, including affordability in the long-term. It is encouraging that this work is being taken forward.”
DORMANT ACCOUNTS
“The BSA has a scheme to reunite people with funds they have lost contact with. Of course this money belongs to those who deposited it, not to Government, charity or anyone else. Where the money cannot be reunited it should be up to individual societies - and their members - to decide whether the funds are reinvested in society. The BSA is working with the Treasury to agree a framework to facilitate this. In mutuals, the money is already used to benefit all members, regardless of whether it is in dormant funds or not.”
INHERITANCE TAX
“As people’s homes are worth more and more, their estates are caught by inheritance tax. We welcome the Chancellor’s decision to raise the limit over three years to £300,000 which will ensure that 94% of estates are not caught by this tax.”
