The main provisions relating to our clients are:
Capital Gains Tax Annual Exemption and Rates
There is an annual exemption for each individual of £11,100 from 5th April 2016. For trustees, the exempt amount is £5,550. Gains up to this amount are free of all Capital Gains Tax.
The rates of Capital Gains Tax are all reduced by 8%. If total taxable income and gains are below £32,000 then the rate of tax is reduced from 18% to 10%. Above that level the rate is now 20% compared to 28%.
Surcharge on Residential Properties
Gains on residential properties, other than your Principal Private Residence which remains exempt, carry a surcharge of 8%, meaning that the rate remains at the old level of 18% for basic rate taxpayers or 28% for higher rate taxpayers.
Entrepreneurs Relief
Qualifying gains continue to be taxed at 10% up to a lifetime limit of £10m. In some circumstances it can be claimed on the disposal of goodwill to a limited company controlled by 5 or fewer persons or by its directors.
SDLT on Additional Residential Properties
From 1st April 2016, the rates of SDLT will increase by 3% on the purchase of a residential property when, at the end of the day of the transaction, the purchaser owns two or more residential properties and are not in the process of changing their Principal Private Residence.
SDLT on Non-Residential Properties
Up to 5th April, SDLT was payable on the whole transaction dependent upon the band which the alue fell into. From 17th March 2016 SDLT will be charged at the appropriate rate for the amount of the transaction value that falls within that band.
The rates and the bands for freehold and lease premiums are:
- Up to £150,000…………………….Nil
- £150,001 to £250,000…………2%
- £250,001 and above…………….5%
For leasehold transactions, the rate payable on the Net Present Value of the rent is now as follows:
- Up to £150,000……………………Nil
- £150,001 – £5m…………………1%
- Over £5m…………………………….2%
Business Rates
From 1st April 2017 the Small Business Rate Relief will be increased from 50% to 100% for business properties with a rateable value of £12,000 or less. Taper relief will be available for rateable values between £12,000 and £15,000.
Insurance Premium Tax
The standard rate is increased from 9.5% to 10% from 1st October 2016.
VAT
From 1st April 2016 the registration limit is increased to £83,000 and the deregistration limit is increased to £81,000.
The turnover limits for the special schemes are:
- Annual accounting…………….£1,350,000
- Cash accounting………………..£1,350,000
- Flat rate scheme………………..£150,000