George Osborne’s Spending Review and Autumn Statement brought a number of changes that will affect property owners and businesses, not all of which will be welcome.
Stamp Duty Increase on Buy to Let Properties and Second Homes
From April 2016 all purchases of Buy to Let and second homes will be subject to an extra 3% stamp duty. This will apply to all purchases over £40,000 but excludes caravans, mobile homes, houseboats or to companies or funds investing in residential property.
There will be a consultation period on some of the detail including the option to exempt companies / funds that own more than 15 residential properties.
Stamp Duty Land Tax – Changes to the Filing and Payment Process
The Government plans to introduce a number of changes to the filing and payment of Stamp Duty including halving the payment deadline from the current 30 days down to 14 days. The changes are due to come into effect in 2017/18 but there will be a consultation beforehand, in 2016.
Annual Tax on Enveloped Dwellings (ATED) and SDLT
The reliefs available from ATED and the 15% higher rate of SDLT will be extended to equity release schemes (home reversion plans), property development activities and properties occupied by employees from 1 April 2016.
The capital gains tax (CGT) computations required by non-residents on the disposal of UK residential property will be changed. With retrospective effect from 6 April 2015, a double charge that may occur will be removed and an omission will be corrected with effect from 25 November 2015. HMRC will be given powers to prescribe circumstances when non-residents are not required to make a CGT return and CGT will be added to the list of taxes that the government may collect on a provisional basis.
CGT Payment on Account on Residential Property
From April 2019, a payment on account of any CGT due on the disposal of residential property will be required within 30 days of the completion of the disposal. This will not affect gains on properties that are not liable for CGT because of private main residence relief. Draft legislation will be published in 2016.
Small Business Rate Relief (SBRR)
The SBRR will continue for another year from 1st April 2016, which exempts small businesses with properties worth less than £6,000 from paying business rates and provides reduced rates for those with properties worth less than £12,000.
Extending Averaging for Farmers
The averaging period for self-employed farmers will be extended from two years to five years with effect from April 2016, with farmers having the option of either averaging period. This follows the consultation announced in the March Budget 2015.
CGT Entrepreneurs’ Relief: Contrived Structures
The government will consider bringing forward legislation to amend the changes made by the Finance Act 2015 to entrepreneurs’ relief, in order to support businesses by ensuring that the relief is available on certain genuine commercial transactions.