George Osborne delivered the Budget for 2016 on 16 March and we have highlighted what we feel are the key points for our clients.

  • Non-Domiciled Individuals – Budget 2016 confirmed that non-doms who become deemed-domiciled in April 2017 can treat the base cost (i.e. the deductible amount in calculating future gains) of their non-UK based assets as being the market value of that asset on 6 April 2017.
  • Capital Gains Tax (CGT) – From the 6th April 2016 the headline rate of CGT will reduce from 28% to 20% for higher rate (and additional rate) taxpayers, and 10% from 18% for basic rate tax payers. These rates will not apply to residential property gains and these will continue to be taxed at 18/28% accordingly.
  • Increase of the Personal Allowance – The tax free personal tax allowance will rise from £10,600 in 2015/16 to £11,000 in 2016/17, and then to £11,500 in 2017/18. The threshold at which people pay 40% income tax will rise to £45,000 in the 2017/18 tax year, bringing many people out of the higher rate band of tax.
  • Annual ISA allowance to increase – The Chancellor announced that the ISA allowance will rise to £20,000 from April 2017, up from the current tax-free limit of £15,240.
  • Lifetime ISA – The Lifetime ISA, which is to be introduced in April 2017, will be available to those aged under-40 and will allow them to save up to £4,000 per year, and in doing so they’ll receive a 25% top-up from the Government. Savers can pay in until they’re 50 years old and the money can be used towards a house deposit or for a pension – the latter requires the money to be held in the ISA until at least the age of 60, although it can be withdrawn earlier upon forfeit of the bonus and a 5% charge.
  • Corporation Tax The headline rate of corporation tax will fall to 17% by 2020 from its current 20%.
  • Stamp Duty for Commercial Properties has been reformed in a similar manner to residential property stamp duty. The rates applicable to the relevant transaction sizes as of the 17th March 2016 are as follows:
       Transaction Value Band Rate
       £0 – £150,000 0%
       £150,001 – £250,000 2%
       £250,000 + 5%
  • Business Rates – The annual threshold for small business tax relief is also being raised from £6,000 to a maximum of £15,000 from April 2017.

If you would like to learn more or should have any questions please do not hesitate to contact any of the Tax team.

Please note that this blog is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content of this blog.

Edwin Coe LLP is a Limited Liability Partnership, registered in England & Wales (No.OC326366). The Firm is authorised and regulated by the Solicitors Regulation Authority. A list of members of the LLP is available for inspection at our registered office address: 2 Stone Buildings, Lincoln’s Inn, London, WC2A 3TH. “Partner” denotes a member of the LLP or an employee or consultant with the equivalent standing. This guide concerns the law in England and Wales and is intended for general guidance purposes only. It is essential to take specific legal advice before taking any action.

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