Stamp duty land tax (SDLT)
A new relief from SDLT will raise the price at which a property becomes liable for SDLT to £300,000 for first-time buyers. Those claiming the relief will pay no SDLT on the first £300,000 of the consideration. No relief will be available where the total consideration is more than £500,000. The relief applies to transactions with effect from 22 November 2017.
The operation of the higher rates of SDLT for additional properties will be amended to give relief for various people including: those increasing their share of their own home, families affected by a divorce court order, spouses buying property from their spouse and cases where properties are held in trust for children subject to Court of Protection orders. A new rule will target the abuse of relief for the replacement of a purchaser’s only or main residence by requiring the purchaser to dispose of the whole of their interest in their former main residence to someone who is not their spouse. These changes take effect from 22 November 2017.
The previously announced reduction in the SDLT filing and payment window from 30 days to 14 days will apply from 1 March 2019.
Business rates in England
Businesses that occupy more than one floor in a building that have been affected by the so-called ‘staircase tax’ will be able to ask for their valuations to be recalculated so that they are based on previous practice backdated to April 2010. This will include those who lost small business rate relief.
The switch in indexation from RPI to consumer price index (CPI) is being brought forward to 1 April 2018. The £1,000 business rate discount for public houses with a rateable value of up to £100,000 will continue for one year from 1 April 2018. This is subject to state aid limits for businesses with multiple properties.
Non-domestic properties will be revalued every three years following the next revaluation due in 2022.
Annual tax on enveloped dwellings (ATED)
The ATED annual charges will increase by 3% from 1 April 2018 in line with the September 2017 CPI.
Gains by non-residents on UK property
All gains on non-residents’ disposals of UK property will be brought within the scope of UK tax. This will apply to gains accrued from April 2019. There will be targeted exemptions for such institutional investors as pension funds.
Taxation of non-resident companies’ UK property income and gains
Non-UK resident companies’ income from UK property will be chargeable to corporation tax rather than income tax from 6 April 2020. From the same date, gains that arise to non-resident companies on the disposal of UK property will be charged to corporation tax rather than CGT.
Half of any interest tax relief for personal buy-to-let borrowing will be limited to a 20% tax credit from 2018/19. Make sure you understand the impact of this latest change on your overall tax position.