The Chancellor, Philip Hammond, delivered his first Autumn Budget last Wednesday, 22nd November 2017.

 

There were a great deal of predictions out prior to the Budget about possible changes in legislation some of which were very dramatic.

The Chancellor opted for a conservative approach in his first Budget laying out that there was to be a reduction in anticipated growth of the economy but that Brexit was not something to be feared.  Many of the measures are set to take place after the UK leaves the EU and this is seen to be a tool to help businesses see what post Brexit Britain will bring. The Government have earmarked £3bn in emergency funds for Brexit.

 

They say ‘all that you can be sure of in life is death and taxes’ and currently that is the perfect analogy of the UK economy!

 

Below is a brief summary of some of the key changes announced in the Budget. As always, if there is anything that you wish to discuss further, or have any concerns with your future tax status, please get in touch with one of the partners.

 

 

Headline Changes
 

• Personal Allowance has increased to £11,850 from April 2018; 40% threshold increases to £46,350.

• Stamp Duty Land Tax (SDLT) for first time buyers abolished for purchases up to £300,000.

• EIS limit increased from £1m to £2m.

 

 

Rates & Allowances

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As expected, the tax free personal allowance will rise from £11,500 to £11,850. This means that in 2018-19, a typical taxpayer will pay £1,075 less income tax than in 2011-11.

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The National Living Wage for those aged 25 and over will increase from £7.50 per hour to £7.83 per hour from April 2018. For a full time worker, this represents a pay rise of over £600 per year.

 

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Property

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The main announcement here was the reduced stamp duty land tax to be paid by first time buyers. Any purchases below £300,000 will have no SDLT to pay, whereas purchases of under £500,000 will benefit from the first £300,000 being relieved. It should be noted that any first time buyers purchasing a property in excess of £500,000 will not qualify for the relief at all.

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Non resident companies will pay corporation tax from April 2020 on UK rental income (previously subject to income tax).

Non resident individuals disposing of commercial property after April 2019 will be subject to UK capital gains tax. This is a major change and will be something to consider for any non-residents owning commercial property in the UK.

 

 

EIS

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After much speculation about reduced EIS reliefs we were pleased to see quite the opposite with the government increasing the level of funding available for EIS companies from £1m to £2m in order to boost economic growth.

 

 

Headline Duty

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Fuel duty will remain frozen for an eighth year in a row, saving drivers £160 a year on average.

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Duty on beer, wine cider and spirits will be frozen, although high strength cider will be subject to a new band of duty.

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Duty on tobacco will rise by 2% and 3% for hand-rolling tobacco.

 

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Offshore trusts

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The Government are introducing rules relating to the taxation of income and gains accruing to offshore trusts.  This measure ensures that payments from an offshore trust intended for a UK resident individual do not escape tax when they are made via an overseas beneficiary or a remittance basis user.  

 

 

Capital Gains Tax

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The introduction of the 30 day payment window between a capital gain arising on a residential property and payment will be deferred until April 2020.  The annual CGT exemption is increased for 2018/2019 from £11,300 for individuals to £11,700.

 

 

Shafiq Meghani