Autumn Statement 2015 – Key Points
These measures come into effect for loans provided, assets acquired or transactions performed on and after 25 November 2015:
- Relieving measure for charities connected to close companies. Where the trustees of the charity hold shares in the close company and the charity receives a loan from that close company, a tax charge of 25% of the loan is currently payable .That tax charge will not apply where the loan from the company is made for a charitable purpose.
- Blocking of tax avoidance schemes involving intangible assets held through partnerships and LLPs which contain a company as a member (mixed partnerships). The law is changed to ensure the intangible asset is treated for tax purposes under the intangible asset rules that apply for companies, when the asset is held by a mixed partnership.
- Manipulation of disposal values of plant and machinery to achieve excess balancing allowances or reduced or no balancing charges under the capital allowances rules. The disposal value will be adjusted for tax purposes to reflect the payment (in whatever form) actually received for the asset. This applies for corporate tax and income tax.
- Where a company or individual takes on the obligations under a lease, in return for some consideration (paid in any form), that consideration will be taxable, even if the consideration is received by a connected person.
- Disguised remuneration schemes will be closed down with effect from 25 November 2015 by the use of retrospective legislation.
FROM APRIL 2016
- No changes to the rates or thresholds for Working or Child Tax Credits, except the income rise disregard will reduce from £5,000 to £2,500.
- Benefit in kind charge for a diesel company car carries a 3% supplement. This was to be removed from 6 April 2016, but it will now stay in place until 2020/21.
- Small Business Rate Relief is extended for a year from 1 April 2016.
- Stamp Duty Land Tax (SDLT) on residential properties purchased to let or as second homes to carry a supplement of 3% on top of the normal rates for residential properties. The government will consult on the policy detail, including whether an exemption for corporates owning more than 15 residential properties is appropriate. This will not apply in Scotland.
- State retirement pension will be set at £119.30 p/w for existing pensioners; AND £155.65 p/w for the new single tier pension for those who reach state pension age on and after 6 April 2016.
- Farmers averaging, which currently allows farmers to average profits over 2 years, will be extended in its scope. From April 2016, farmers will have the option of averaging profits over a 2 or 5 year period. This will be a welcome boost for farmers as it will assist further in preventing them being penalised due to the annual fluctuations of farming profits.
FROM APRIL 2017
- Tax-free childcare savings scheme will only be available where parents earn below £100,000, previously the earnings cap was to be set at £150,000. Each parent will have to work for a minimum of 16 hours/week to qualify.
- SDLT will have to be paid within 14 days of completion of property purchase – not 30 days as is currently the case.
- Apprentices levy will be 0.5% of employer’s wage bill, but employer will get a £15,000 allowance to set against this. Only employers with wages bills of over £3 million will pay the levy.
- Capital Gains Tax due on the disposal of residences will be payable within 30 days of the completion disposal.