Autumn Statement 2014 Update
Here is a brief note of some of the changes announced by the Treasury on 3 December 2014 and a reminder of some other things that will come into force on 5 April 2014.
Stamp Duty Land Tax – The rates for SDLT will be restructured so that they apply on an incremental basis rather than as a “slab” charge. Houses purchased under £937,000 will have a lower SDLT charge, those above this figure will have a higher charge.
Non-residents CGT on sale of UK residential property – From 5 April 2015 non-UK residents will be subject to capital gains tax on the sale of UK residential property. The CGT base cost of properties owned by Non-residents as at 5/4/15 will be rebased to that date.
Incorporation Reliefs for Goodwill Denied – The incorporation of a sole trade or partnership into a limited company will no longer result in a tax beneficial outcome in relation to the sale of goodwill in such a transaction. Trading as a limited company will still generally provide a better outcome for business owners though.
Research and Development Tax Credits – There will be a pre-claim clearance facility where HMRC must give their opinion to a request as to whether activities are classed as research and development.
Transfer of Personal Allowance between Spouses – From 6/4/15 £1,060 of unused personal allowances of husband or wife may be transferred to their spouse. The recipient of the excess allowance can only be a basic rate taxpayer, so relief is only available at 20%.
Exemptions from NIC Employers Contributions – From 6/4/15 employers will not pay National Insurance on employees aged under 21, on their earnings below the upper threshold.
Deferred Gains that Would have Qualified for Entrepreneurs’ Relief – Gains deferred into shares that qualify for EIS which would have qualified for Entrepreneurs’ relief can now qualify for Entrepreneurs’ Relief when they crystallise out of the EIS shares. Some care is require with the transition.
Direct Recovery of Debts – From 6/4/15 HMRC will have powers to get money owed directly from taxpayers’ accounts. The results of the recent consultation are that there are many more safeguards for taxpayers than was originally proposed.
See our December 2014 Tax Update for more recent cases.