Budget 2013
"Investors are likely to benefit from today's Budget –including a welcome announcement for child trust fund holders.
The highlights include:
• Child Trust Funds and Junior ISAs - consultation to allow transfers
• Abolition of stamp duty for AIM share purchases from April 2014
• Personal income tax allowance will increase to £10,000 from April 2014
• Single-tier state pension to be brought forward to 2016
The Chancellor will look at options for transferring Child Trust Funds to Junior ISAs. Although we don't expect to see any change before April 2014, this is still excellent news – if transfers are allowed it will give the parents of some 6.1 million children greater freedom to choose the best option when saving and investing for their child.
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CTFs have been in terminal decline since 2011, seeing millions trapped in expensive products or suffering a more restricted investment choice than their Junior ISA counterparts.
We expect the consultation should ultimately lead to a full merger of the two products, in the same way that PEPs and ISAs merged.
The government will abolish stamp duty (and stamp duty reserve tax) on shares in companies quoted on growth markets including the Alternative Investment Market (AIM) and the ISDX Growth Market.
This also won't happen until April 2014. The government has also started consulting on AIM stocks being allowed in ISA from April 2014. Investors need to be careful of the additional risks of AIM stocks and make their decisions based on investment reasons first, not tax.
As with most Budgets we learned little on the day."
Danny Cox, head of Financial Planning at Hargreaves Lansdown.
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