This month saw the UK Chancellor’s Budget announcement.  Below are the areas we believe may affect our clients. Please note that some of these are with immediate effect.

Changes with effect from 19 March 2014:

UK Residential Property for non-natural persons
The government is extending the tax regime on UK dwellings owned by non-UK companies, partnerships with company members and collective investment vehicles for properties with a value of £500,000 (compared to the previous £2 million threshold):

• Stamp Duty Land Tax will be 15%
• Properties valued between £1m – £2m will pay Annual Tax on Enveloped Property Tax of £7,000 due on 31 October 2015
• Penal capital gains tax rates on disposal

Changes with effect from 27 March 2014:

Pensions
There is no limit on the amount the pensioner can take annually as drawdown if their “relevant income” is at least £12,000. Pension members over 60 with pension savings of £30,000 or less can take all of their pension savings as lump sums.

Changes with effect from 6 April 2014:

PPR Capital Gains tax Relief
The period immediately before disposal of property, which is disregarded when determining the capital gains tax exemption on the disposal where the property has at some time, been an individual’s main residence will be reduced from 36 to 18 months.

Dual Contracts
UK resident non-domiciles claiming the remittance basis and using separate contracts for UK and overseas duties with the same or and associated employer will be taxed on the arising basis. This is disregarded if the foreign tax on the overseas income is more than 29.25%.

Changes with effect from July 2014:

ISAs
All ISAs will become a simpler product New ISAs. The subscription limit will be £15,000 for 2014/15 and it will now be possible to subscribe for the full amount in cash (currently it is only 50%). Can also transfer stocks and shares ISAs into NISAs

Changes with effect from 6 April 2015:

CGT charge on Residential property by Non-Residents
Legislation will be introduced to charge capital gains tax on future gains made by non-residents disposing of UK residential property. A consultation process will be set-up to review the implementation of this charge.

Capital gains for non-residents
Legislation will be introduced to ensure that remittance basis taxpayer’s, whilst they are not resident and claiming the split year treatment will not be subject to tax on capital gains tax. This is intended to correct a defect in current legislation.

See the attached link below to the changes in the Income, NIC, Inheritance and Corporate tax rates.

Chancellor’s full report

Previous budget posts on our blog:
UK 2013 Budget Announcement
UK 2013 Budget Highlights
UK Budget 2012: How is the American Affected?