Published 8th March 2021
The UK Chancellor delivered his budget on Wednesday 3rd March 2021 when he announced changes to UK tax. This budget was notable for how little has been changed. The following notes are the highlights we think will interest landlords!
The rates of income tax are unchanged. The bands of income to which they apply are slightly increased for 2021-22 reducing (slightly) the tax burden. As predicted, the Personal Allowance has risen from £12,500 to £12,570. The basic rate (20%) band has widened from £37,500 to £37,700. There have been a few very minor changes to other allowances, but the treatment of interest and dividends remains unchanged. See more detail on the personal tax rates page. If you live in Scotland: the rates, bands and allowances remain unchanged from 2020-21, and therefore the gap between the burden for Scottish residents and those in the rest of the UK has widened slightly.
For companies making less than £50,000 taxable profit, there are no changes to the rate of tax. With effect from 1st April 2023, companies making more than £50,000 profit will be subject to higher rates of Corporation Tax. The rate will rise progressively until at £250,000 profit the tax rate is 25%. There are other changes to the rules for loss relief.
Capital Gains Tax (CGT)
There are no changes to the rules for UK taxation arising on a disposal of an asset.
Stamp Duty Land Tax (SDLT)
On 8th July 2020, the Stamp Duty Land Tax rates were temporarily reduced until 31st March 2021. This has now been extended until 30th June 2021 and then a different but also reduced set of rates will apply until 30th September 2021. See more detail on the personal tax rates page.
Purchases of residential property by a non-resident will be subject to a 2% surcharge with effect from 1st April 2021. Purchase of a second or subsequent residential property by both UK residents and non-residents is subject to an uplift of 3% in the SDLT charged.
Annual Tax on Enveloped Dwellings (ATED)
The rates have been increased slightly see personal tax rates.
This newsletter sets out some of the highlights that we think are relevant to our clients. This is not an exhaustive report on the March 2021 Budget, nor does it address any detail.
If any of these subjects are relevant to you or if you want to know about other topics dealt with in the March 2021 Budget, you should contact us for more detail
The information contained in this article is believed to be correct at the time of publication. The content of this article is intended to be a brief summary of the principal points of the legislation or proposed legislation only, and it is provided for general guidance only. It may not take into account subsequent changes in the law and of necessity it omits much detail. Taxation is a complicated subject and is subject to change. You should only rely on advice prepared specifically for you. Neither the writer nor Landlords Tax Services Ltd can be held liable for any loss arising from any act or omission by you as a result of your understanding of this article. If the subject matter is of interest you should contact us to see if there is a relevant update, and to take professional advice which takes into account your circumstances.