SDLT increase for Buy To Lets and Second Homes
Prospective landlords of residential property, or individuals fortunate enough to be able to afford additional homes in the UK, will be subject to an additional 3% Stamp Duty Land Tax on the purchase of these properties from 1st April 2016.
Whilst final details were not available at the time of publication, it is thought that corporate property developers will not be subject to the additional tax on the purchase of residential property.
In addition, the government are expecting to introduce a shorter time period for the payment of SDLT on all property purchases. This will mean that from April 2017, SDLT will be payable within 14 days of completion.
Any landlords considering the expansion of their property portfolios would be wise to bring forward any potential purchases. However, they should also consider the other announcements made in the Summer Budget restricting both ‘wear and tear’ allowances and mortgage interest relief from April 2016 and April 2017 respectively.
If you are considering your investment options other than property as a result, why not have a free initial consultation with one of the A4G Wealth advisers. Speak to one of our Principal Advisers to find out more.
Digital Tax Accounts & Earlier Payment of Tax
From 2020, the government are expecting most businesses and individuals to maintain a digital tax record.
Current suggestions are that this will involve the update of the digital account at least quarterly. It is also expected that the payment of any taxes will be brought more closely into line with the quarter in which the income or profits are made. In other words, it is likely that you will pay your tax sooner!
The first suggestion of earlier tax payments was in this Autumn Statement, with the proposal for Capital Gains Tax on the sale of residential property to be payable within 30 days, rather than the January following the tax year. This would be effective from April 2019, and may well be considered another attack on residential landlords.
The government is due to consult on the details for the digital tax accounts during 2016 and of course, we will keep you up to speed with any developments in this area.
Investment in Housing
In a further attempt to tackle the affordability of housing, it was announced that 400,000 affordable homes will be built by 2020/21, including 200,000 ‘Starter Homes’ that would be sold at a 20% discount to young first time buyers.
As part of this effort, £310 million was announced as funding to help to build the new garden city at Ebbsfleet. This will inevitably help with the expansion of the North Kent Innovation Zone to stimulate new business in the area local to our offices.
It should not be forgotten that on 1st December 2015, the new Help to Buy ISA will also be launched as detailed in our Summer Budget newsletter.
Extension of free Childcare
From September 2017, parents of 3-4 year olds will be able to access free childcare for 30 hours per week. This will be available to all parents working at least 16 hours per week who earn less than £100,000 per annum.
This will be combined with the ‘tax-free childcare’ system that is due to be introduced from early 2017, with this system then providing 20% effective tax relief on the first £6,000 of childcare costs (per child).
In the interim, the childcare vouchers scheme will continue allowing basic rate taxpayers to claim up to £55 per week (per parent) for regulated childcare for children up to 15 years old. Higher and additional rate taxpayers can claim £28/week and £25/week respectively.
Childcare vouchers are available tax-free from employers (including owner-managers themselves). If you would like to find out more, speak to your Principal Advisers.
Increase to State Pensions
The basic state pension is set to increase to £119.30 per week from April 2016.
For those reaching pension age from April 2016, a new single tier pension will be paid with a starting rate of £155.65 per week.
Despite the increases, this does still pose the question of whether you would be able to survive on the state pension alone.
If you are concerned that you may not be putting aside sufficient savings for your retirement, why not have a chat with one of the A4G Wealth advisers?
End of Personal Injury Claims?
If you are sick of receiving those annoying phone calls about a supposed accident that you may have suffered in the last x years, George Osborne has heard you!
It is planned that the right to compensation claims as a result of minor whiplash injuries will end. Whilst no date has been announced as yet, consultations will take place in the New Year.
The result – no annoying phone calls, and possibly £40-50 off your car insurance!