The main highlights of the Budget announcements are as follows:
Personal Tax
• Increase in the personal allowance to £12,500 from 2019/20
• From 6 April 2020 the final period of exemption for principal private residence relief (PPR) will be reduced from 18 months to 9 months. Also letting relief will be amended such that relief will only be available where there is shared occupancy (i.e. the owner and tenant both live in the residence).
• The proposed changes to rent a room relief have been dropped so no changes there.
Capital Gains Tax
• The minimum qualifying period that applies for Entrepreneurs’ relief will be extended from one year to two years.
• From 6 April 2019 the non-resident capital gains tax (NRCGT) regime is to be extended to non-residential property meaning all disposals of interests in UK land by non-residents will be within the scope of the regime. Any capital gains tax due must be paid within 30 days of completion regardless of whether a tax return has been issued or not.
• From 6 April 2020 ― the same regime for NTCGT will apply to UK residents who make a gain on a disposal of UK residential property (delayed by one year)
Capital Allowances
• AIA will be increased to £1m from 1 January 2019 for two years (up from the current threshold of £200k).
• A new structures and building allowance (SBA) introduced on expenditure on or after 29 October 2018.
• WDA on the special rate pool will be reduced from 8% to 6%.
Employment Tax
• The plan to charge Class 1A NIC on the excess of termination payments over £30,000 will be delayed by one year and will now not be in force until April 2020.
Corporation Tax
• From 1 April 2020, brought forward capital losses will be restricted to 50% of annual capital gains.
• Reform of intangible fixed assets, partial reinstatement of relief for acquired goodwill in the acquisitions of business with eligible intellectual property from April 2019.
• Definition of a ‘permanent establishment’ has been extended.
VAT
• Current VAT thresholds will remain the same until April 2022.
Stamp Duty Land Tax
• Time allowed to amend a tax return relating to higher rates for additional dwellings from three months to twelve months for those who sell their old homes more than 12 months after they buy a new home.