By Jo White, Tax Consultant at Kreston Reeves
Whilst there was a heavy focus on the housing market the tax announcements made by the Chancellor this afternoon were not specifically geared at landlords.
As is typical of his speech he announced the new personal allowance and higher rate threshold being £11,850 and £46,350 respectively. This is said to give the average person an additional £1,075 for the year compared to 2010-11.
Whilst not announced by the Chancellor it has been confirmed that landlords will now be able to claim mileage at the approved rates for their property business. Previously travel costs have been allowable but you have had to work out a proportion of business use of your total overall costs of petrol etc. which has meant some landlords have felt it more burden than benefit.
In addition, it was confirmed that the pre-announced 30 day time-limit for payment of Capital Gains Tax on the sale of residential property will not take place until April 2020.
For those with properties held in companies there was no change to the pre-announced reduction in Dividend Allowance from £5,000 to £2,000 which remains from April 2018.
The Chancellor was clear that he wanted to make the housing market accessible to all and therefore announced that first-time buyers will not have to pay SDLT on a purchase price of up to £300,000. Where the purchase price is up to £500,000 then the difference will be paid at 5%.
It was confirmed, that the Making Tax Digital system will only impact businesses who have turnover in excess of the VAT threshold in April 2019. All others will not be mandated into the system until at least 2020. For those who will have to start using it in 2019, only your VAT requirements would need to be considered initially.
Outside of this, the normal duties increases were confirmed. Philip Hammond commented that both fuel and alcohol duties would be frozen in the main and tobacco duties will increase by 2% above RPI.
Finally, the starting rate for savings income remains at 0% for the first £5,000 of this type of income. The ISA limit remains at £20,000 and the Junior ISA and Child Trust Funds annual limit will increase to £4,260.
For specialist tax advice please contact Kreston Reeves.