As part of the package of measures announced by the Chancellor in his budget, the following property related changes will be introduced.
Business Rates Relief
Business rates will be abolished for the financial year 2020/21 for shops, restaurants, hotels, cinemas and music venues which have a rateable value of less than £51,000.00.
Entrepreneurs’ Relief
Entrepreneurs’ relief takes effect by reducing the rate of tax payable on capital gains on the sale of a business to 10%.
Until now the lifetime restriction, that is to say the limit of gains for which relief can be sought, has been £10 million.
With effect from 11 March 2020, the relief will be cut to £1 million. This reduces the maximum tax saving that can be achieved by claiming the relief (on current tax rates) from £1 million to £100,000. The change will apply to all disposals made on or after 11 March 2020, which will include sales under conditional contracts which have exchanged, but where the conditions precedent to completion have not yet been satisfied.
Stamp Duty Land Tax for Non-UK Residents
The top rate of Stamp Duty Land Tax for UK residents is 12%. If you buy a second home, you will pay an extra 3% Stamp Duty Land Tax making the top rate 15%.
From April 2021, non-UK residents purchasing residential property in England and Northern Ireland will pay an additional 2% on top of that making the top rate 17%.
So, for example, based on the average house price in London (£438,922.00) Stamp Duty Land Tax for a non-UK resident will increase from £28,713.00 to £38,391.00.
If you would like any further information or advice, please contact our Property Team on 01934 623501 for residential and commercial property enquiries.