Today, 25 November 2015, the UK Chancellor of the Exchequer George Osborne delivered his Autumn Statement. The UK is confirmed to be the fastest growing economy within the G7 since 2010. In the meantime the productivity and living standards are improving and an increase of one million jobs is expected in the next 5 years.
The Office for Budget Responsibility (“OBR”) has revised its GDP growth up to 2.4% in 2015. Here is the OBR forecast for GDP and the Government expectations for the National Debt figures for the next five years:
With the Autumn 2015 statement the Government has mainly unveiled its Comprehensive Spending Review for the next five years as more substantial tax changes were communicated in the previous Budget and Summer Budget 2015. We expect to communicate further major tax changes to clients (if any) after the Government Consultations. If this is something of interest please get in touch.
Tony Flanagan Managing Partner
Stamp Duty set to Increase
Today the Chancellor has announced that buy-to-let landlords and people buying second homes will soon have to pay a higher rate of stamp duty. From the 6th of April 2016 individuals who wish to use the residential property market as a source of income will have to pay a 3% surcharge on the purchase value of the property.
Despite the many recent changes to Stamp Duty legislation, structures are still available for clients which do not fall foul of these changes.
Individuals undertaking UK property acquisitions as a second home or as a source of investment can rely on our tax team to make them aware of the potential substantial UK tax savings which may be provided considering their individual circumstances.
The UK Government has “opened the door” to the devolution of corporation tax for different provinces within the United Kingdom. For example, this devolution could lead to an incoming reduction of Northern Ireland corporation tax. George Osborne has today stated that “the parties (the Northern Ireland Government) have now confirmed they wish to set [corporation tax] at the rate of 12.5 per cent”
The corporation tax in the UK is confirmed to be 18 per cent from April 2016. The Chancellor confirmed that this is in line with “our plan for Britain for the next five years to keep moving us from a low wage, high tax, high welfare economy, to the higher wage, lower tax, lower welfare country we intend to create.”
Tax Digital Transformation
The UK Government has allocated resources in order to digitalise the tax system and introduce personalised digital accounts, removing the need for annual tax returns. This will transform HM Revenue & Customs (HMRC) into one of the most digitally advanced tax administrations in the world, with access to digital tax accounts for all small businesses and individuals by 2016-17.
HMRC’s digital systems will also be used to dramatically limit the period of time allowed for individuals to pay capital gains tax (CGT) from 2019. At present CGT due on residential property is currently paid between 10 and 22 months after a disposal is made. Using the new digital system, the period of time for CGT to be paid will shrink to within 30 days of completion of the disposal.
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