The Chancellor of the Exchequer, George Osborne, delivered his first Autumn statement as the Chancellor of a Conservative government today.
The message seemed positive in terms of growth. He announced that no economy in the G7 has grown faster than the UK in any year since 2010 and confirmed that growth for 2015 and 2018 would be in line with the predictions set out in the Summer Budget and that growth in 2016 and 2017 is likely to be slightly ahead of forecasts.
He also said that the UK is on course to move into surplus in 2019/20, adding that debt will decrease in the years after.
As expected, there were no significant tax announcements made, as all of the key changes were revealed during the summer budget. However, the key points were as follows:
Stamp Duty Land Tax
He announced a 3% stamp duty surcharge on the purchase of additional residential properties, such as buy to let properties and second homes, which cost more than £40,000. The increase will apply from 1 April 2016.
The government will consult on the policy details but has confirmed that the higher rates will not apply to purchases of caravans, mobile homes or houseboats, or to corporates or funds making significant investments in residential property.
If you are planning to buy an investment property there is therefore only four month window to purchase this before the stamp duty increase.
Capital Gains Tax: payment window
From April 2019, it is proposed that Capital Gains Tax ("CGT") applies in certain cases when an asset is sold for more than it was originally purchased. The taxable gain (profit) may be triggered following the transfer of an asset, although commonly this would follow a sale. A number of tax reliefs are available to exempt or reduce the tax that may apply. Basic tax planning may... More will be payable on the disposal of residential property within 30 days of the completion of the disposal, rather than the normal 31 January payment deadline after the tax year in which the disposal took place. This is line with the current treatment for non UK residents who dispose of UK residential property.
This will not affect gains on properties which are not liable for Capital Gains Tax ("CGT") applies in certain cases when an asset is sold for more than it was originally purchased. The taxable gain (profit) may be triggered following the transfer of an asset, although commonly this would follow a sale. A number of tax reliefs are available to exempt or reduce the tax that may apply. Basic tax planning may... More due to Private Residence Relief. The government is due to publish draft legislation for consultation in 2016.
He confirmed that tax credits will now remain unchanged, with the proposed changes to income thresholds and taper rates now being abandoned.
If you would like any advice on how any of today’s announcements affect you, please contact us.