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Income tax
Personal allowance for 2019/20 will increase to £12,500. Basic rate limit will increase to £37,500.
Capital gains tax
Annual CGT exempt amount for 2019/20 will increase to £12,000 for individuals and £6,000 for personal representatives and most trusts.
Main residence exemption
From April 2020 the ‘letting allowance’ is to apply only if the owner shares occupation, and the last 18 months non-occupation period disregarded is to be cut to 9 months.
The CGT on gains on disposal of residential property after 5 April 2020 is to be payable within 30 days of completion – rather than on 31 January after the end of the tax year.
National Insurance Contributions (NIC)
Class 2 NIC will not now be abolished from April 2019, as was previously announced.
Entrepreneurs’ relief (ER)
ER will not be lost if the investor’s shareholding falls below 5%, in that the investor may elect to notionally dispose of his shares, getting ER then, but defer the payment until the actual disposal. The definition of ‘personal company’ is tightened up and the company must be the investor’s personal company for at least two years, for disposals after 28 October 2018.
Pensions
The lifetime pension allowance is increased to £1.055m for 2019/20.
Annual investment allowance
To be increased from £200,000k to £1m for two years from 1 January 2019. The special writing-down allowance rate is cut from 8% to 6% from April 2019.
IR35
PAYE obligation (currently only for public sector clients) is to be extended to private clients from April 2020 if large or medium.
Digital services tax
A new digital services tax is to be introduced pending global approach from April 2020, to be consulted on.
Insolvency
HMRC is always to be a preferential creditor.
Non-residents
Are to be subject to tax on gains on disposal of all UK ’immovable property’ and also on assets deriving at least 75% of their value from UK land (except if it is used in the company’s trade) with effect from April 2019. Currently non-residents are only taxed on gains on disposal of UK residential property.
Non-resident companies’ UK property income, and gains on UK residential property, are to be subject to corporation tax from April 2020.
The CGT exit charge when a trust becomes non-resident after 5 April 2019 may be paid over 6 years, with interest, if becomes resident in another EU or EEA state, provided its assets continue to be used for an economically significant activity.
Royalties
A withholding tax is to apply to royalties paid from 6 April 2019 to non-residents who are not resident in a ‘full treaty territory’.
Stamp duty land tax (SDLT)
The SDLT relief for first-time buyers of residential property which applied from 22 November 2017 is to be extended, with retrospective effect, to shared-ownership situations.
The SDLT filing date is to be cut from 30 days to 14 days for transactions from 1 March 2019.
Business rates
For properties with a rateable value not over £51,000, business rates are to be cut by a third for two years, pending revaluation in 2021.
Specific advice should be obtained before taking action, or refraining from taking action, in relation to the above. If you would like advice or further information, please speak to your usual Shipleys contact.
