- On 6th April 2012 the standard personal allowance will rise from £7,475 to £8,105
- From 6th April 2013 this will increase further to £9,205
- There will be savings for higher rate taxpayers with incomes of less than £100,000 although this will be modest due to restrictions in the basic rate band. Individuals with income above this will continue to have their allowances withdrawn at a rate £1 for every £2 of income
The increase to the personal allowance is good news for landlords. If you leverage your investments you will now be able to keep an even larger proportion of your rental income tax free.
- New Stamp Duty Land Tax (SLDT) rate of 7% charged on residential properties acquired for more than £2 million. This measure starts on 22/03/12
- New Stamp Duty Land Tax (SLDT) rate of 15% charged on residential properties worth more than £2 million if bought through a company. This measure is effective from 21/03/12
- There will be a consultation this year followed by implementation in April 2013 on the proposed annual, value based levy for residential properties valued at over £2 million that are already held by companies
- There are no changes for stamp duty payable on commercial property transactions
The new stamp duty rates will only impact a very small percentage of residential property transactions. In November 2011 just 0.2% of properties transacted in the UK would have fallen above this new stamp duty threshold. Investors already owning, or planning to buy property valued at more than £2 million should review the ownership structure of their property holdings with their tax advisors.
CAPITAL GAINS TAX
- From 6th April 2013 the government is proposing to introduce a capital gains tax charge on residential properties sold by non-UK companies (this does not include non-UK individuals). There will be a consultation on this later this year alongside the consultation on the proposed annual SLDT charge on certain residential properties already held in structures like this.
INVESTORS OWNING PROPERTY HELD BY NON-UK COMPANIES SHOULD CONSIDER REVIEWING THEIR OWNERSHIP STRUCTURES WITH THEIR TAX ADVISORS.
Source: Deloitte & PWC