Budget March 2016 – Highlights in Brief
On 16 March 2016, the Chancellor, George Osborne, delivered his Budget statement to the House of Commons. The Budget contained some important announcements and confirmed a number of changes planned for the new tax year.
Following this, we have put together our Beavis Morgan Budget 2016 Overview containing the latest tax and financial information, which we trust you will find useful.
A summary of the key points which may affect you and your business include:
Lower corporation tax – Currently 20% for all companies. In the July 2015 Budget, it was announced that this would reduce to 19% from April 2017. The Chancellor has now however announced that this will now be reduced to 17% from 1 April 2020.
Capital Gains Tax – The rate payable on the sale of an asset will reduce to 20% (currently 28%) for higher rate tax payers and 10% (from 18%) for basic rate tax payers (although there will be a surcharge of 8% on carried interest, as well as gains from residential property sales, removing any benefit for buy-to-let landlords).
Entrepreneur’s Relief will be extended to external investors in an unlisted trading company for shares acquired after 17 March 2016, and held for at least three years from 6 April 2016.
The rate of tax on loans to participators (currently 25%) will be linked to the dividend upper rate (32.5% from 6 April 2016). This will encourage participators to extract cash as dividend income, rather leave as a loan due from them.
As announced in the Autumn Statement 2015, higher rates of Stamp Duty Land Tax (SDLT) will be charged on purchases of additional residential properties, such as second homes and buy-to-let properties. The higher rates will be 3% points above the current SDLT rates.
From April 2017 – Small business rate cuts will mean that those occupying commercial property with a rateable value of £12,000 or less will pay no rates.
For further information on how the changes may affect you and your business, please contact a member of the Beavis Morgan tax team or your usual Client Partner.