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or for a pension – the latter requires the money to be held in the ISA until at least the age of 60, although it can be withdrawn earlier upon forfeit of the bonus and a 5% charge.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%|
- 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.
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