Autumn Budget 2017 | Other Announcements

SDLT exemption for First Time Buyers

No doubt one of the big headline grabbers – with immediate effect, first time buyers will be exempt from paying Stamp Duty Land Tax on properties worth up to £300,000.

Those first-time buyers who are able to afford properties up to £500,000 will also be exempt from SDLT on the first £300,000, and will have the effect of saving the individual(s) up to £5,000.

The rate of SDLT charged on the property value above £300,000 will remain at the usual rate of 5% for properties in this band.

In addition, the existing Help to Buy regime will continue for first time buyers with deposits of 5%.

 

Announcements affecting Landlords

Thankfully, landlords of residential properties have emerged from this Budget relatively unscathed following the tax changes over the last couple of years.

A couple of items of note for those active in property in the Autumn Budget were:

  • Removal of indexation allowance from January 2018 on corporate gains

This removes tax relief against the effect of inflation on gains made in limited companies. Whilst inflation remains low, this will have relatively minor impact. Relief will still be available on the effect of inflation up to January 2018 in any case.

  • Focus on building of high quality, high density properties in urban areas

This may be of interest to those landlords (and property developers) seeking to maximise their return on properties owned particularly in urban areas as planning restrictions in respect of conversion opportunities may be relaxed.

  • Council Tax on Empty Homes

It was announced that owners of empty residential properties may be charged up a premium of up to 100% of the usual council tax charge, being an obvious attempt to release more housing stock into the market.

If you are looking to invest in property and wish to understand your options, particularly given the recent tax changes, please contact Janice Offer, Hayley Cramer or Lee Dyson who will be happy to assist.

 

Tax-Free Childcare vs. Childcare Vouchers

As previously announced, since September 2017, parents of 3-4 year olds are able to access free childcare for 30 hours per week. This is available to all parents working at least 16 hours per week who earn less than £100,000 each per annum.

This will be combined with the ‘tax-free childcare’ system that was introduced in April 2017, with this system then providing 20% effective tax relief on the first £10,000 of childcare costs (per child).

However, the more generous childcare vouchers scheme will continue for new entrants until April 2018 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 Adviser.

 

Pensions and Investments

The lifetime allowance for pension investments will increase by inflation to £1.03million from 6th April 2018.

However, the recent Royal Assent of the Finance Act (No 2) 2017 does restrict the ability to recycle pensions for the purposes of gaining additional tax relief.

ISA limits will remain unchanged in 2018/19 at £20,000 (inclusive of any contributions to a lifetime ISA), although maximum limits for contributions to Junior ISA’s or Child Trust Funds will be increased to £4,260.

For further advice on investments, please contact us in order to be put in touch with one of our Independent Financial Advisers at A4G Wealth

 

Changes to Duties

As appears to be customary each Budget, the rate of duty applied to tobacco has increased by 2% above inflation from 6pm on 22nd November 2017, with duty on hand rolling tobacco increased by 3% above inflation.

The rates of Vehicle Excise Duty will increase by RPI inflation from 1st April 2018, although the First Year VED on new diesel cars not meeting the RDE2 standard will be calculated as if they were in the next highest VED band.

If the above vexes you, then be reassured that fuel duty and duty charged on alcohol (with the exception of higher alcohol cider) will be frozen. Just please make sure that you don’t enjoy the two at the same time!