Although the economic forecast suggests a slower growth rate, industry players appear to be more concerned over infrastructure expenditure.

Delivered by Philip Hammond, who succeeded George Osborne as Chancellor of the Exchequer following Prime Minister Theresa May's parliamentary shake-up earlier this year, the UK's Autumn Statement proved mostly uneventful for the wealth management industry. However, it did create conflicting views across the board over the government's expenditure plans. 

Certain industry figureheads appear optimistic following yesterday's Statement, which saw the UK government pledge an additional £23 billion ($28.5 billion) into infrastructure and innovation, indicating that investors and businesses may both reap the benefits.

Among Hammond's array of announcements was the launch of a National Productivity Investment Fund, which seeks to provide major additional spending in areas key to boosting productivity, including transport, digital communications, research and development and housing.

“Investors and businesses alike will benefit from the funding, which will trickle down to surrounding sectors such as property,” said Agate Freimane, senior investment director at BrickVest. “Plans to fast-track scheduled projects like Crossrail 2 will in turn boost momentum in the UK’s property market as historically, areas that receive infrastructure investment typically benefit from a boost in both rental yield and capital growth.”

Hugi Clarke, director at Foresight Group, said: “The chancellor’s announcement to prioritise high-value investment in infrastructure is going to be a boon for institutional and private investors alike. As the UK and the US confront the uncertainties thrown up by Brexit and the new political order in the US, leading to wild swings in exchange rates and equity markets, stable assets such as infrastructure become a safe haven.”

However, as the saying goes, one man's treasure is another man's trash and while some have welcomed increased infrastructure investment with open arms, others perceive it as somewhat of a backwards move.

“The chancellor's infrastructure plan is upside down,” said Christopher Mahon, investment manager and director of asset allocation research at Barings. He added: “The treasury has already committed eye watering sums of money to programmes such as HS2, Heathrow & Hinkley that won't be completed for another 20 years.

“It is a great shame that the Chancellor continues to be seduced by the glamour of the mega and ignores the utility and timeliness of the micro. Britain seems to be locked into a type of topsy-turvy spending dogma which results in the UK’s well-known productivity stagnation.”

UBS Wealth Management's UK economist Dean Turner also voiced concerns.

“Small-scale initiatives announced by the chancellor are likely to provide support to the economy in the near term, but are unlikely to be large enough to offset the fall in investment elsewhere within the economy,” Turner said.

Still, industry associations were more upbeat. 

The Wealth Management Association's chief executive Liz Field commented: “We greet today’s stamp duty review with much enthusiasm. It is vital to protect the interests of investors and the investment industry in the UK and removal of this tax would grow the UK’s competitive advantage and increase trading and liquidity.”

Chris Cummings, CEO of the Investment Association, was also in favour of an increased focus on infrastructure investment. He said: “To turn this policy into practical solutions requires a partnership between policymakers and the industry. That is why we are giving our formal backing to the development of a UK municipal bond market, which will help local authorities secure much-needed financing to invest in new infrastructure projects and meet their refinancing needs.”

Given the potential fallout of the Brexit vote, some have cited a general feeling of disappointment over a lack of support for the financial services industry as a whole. 

“Given the distinct ambiguity regarding Brexit and how its implementation will be felt across all industries, it is disappointing that Hammond did not deliver any key positive messages to help the businesses who with each day are facing uncertain futures," said Chris Fisher, CEO of Multrees Investor Services. He added: "It is imperative that the financial services industry – the key revenue generator of the UK,  is reassured and given strong signals that the UK government is thinking ahead on how to keep its key industries competitive in a global environment. Hammond needs to think about this and start implementing ideas now ahead of Article 50 being triggered.”

Meanwhile, the government's updated economic forecast suggests slower growth and increased inflation over the next two years, which could be attributed to market turbulence as the nation prepares for its divorce from the European Union.

Income Tax

As previously announced in welcome news to middle income earners, the 40 per cent higher rate threshold of income tax will increase from £43,000 this year, to £45,000 in 2017-18. The threshold is now set to rise to £50,000 by 2020-21. 

Tax Avoidance

As part of ongoing efforts to reduce the deficit, the government will, as usual, press ahead with its plans for a new penalty for those who assist others in tax avoidance schemes, such as advisors. They could be subject to HMRC’s new ‘naming and shaming’ laws if they do not stay away from ‘highly artificial’ tax schemes.

Non-Doms

As previously stated, the government will continue with its plans to terminate the permanency of non-domiciled tax status. As of April 2017, non-domiciled individuals will be deemed UK-domiciled for tax purposes if they have been a UK resident for 15 of the past 20 years, or if they were born in the UK with a UK domicile of origin. 

As of the same date, inheritance tax will be charged on UK residential property when it is held indirectly by a non-dom through an offshore structure, such as a company or trust. This move will close a loophole that has been exploited by many to avoid paying inheritance tax on their UK residential property, the government said.

Additionally, rules will change for the Business Investment Relief scheme, making it easier for non-doms who are taxed on the remittance basis to bring offshore money into the UK for the purpose of investing in UK businesses.