Ms Griffin explains further: “The proposals have come at an interesting time, and may suggest the government wants to deter people from switching their residential portfolio holding into commercial property to gain a tax advantage.”
She recalls: “It was only a couple of years ago that the CGT exemption on residential property was removed, and only this year that the inheritance tax exemption on residential property through an overseas corporate structure was removed.
“The new rules will help avoid any shift in behaviour towards selling residential property and buying commercial property and will level out the taxation between UK residents and non-residents.”
For a fuller break down of the Budget announcements on tax, see the table below.
| Tax | Changes in Autumn Budget 2017 | Changes in 2017 Spring Budget |
| Income tax and personal allowances | In April 2018 as previously mentioned, personal allowance will rise to £11,850 and the higher rate threshold to £46,350. NEW: Government will now allow claims for marriage allowance in cases where a partner has died before the claim was made, and can be backdated for up to four years. | Government continues with plans to increase personal allowance "by more than inflation" in 2017/2018. Personal allowance confirmed it will rise to £11,500, with a £2,000 increase to higher rate threshold. |
| Dividend tax | No changes mentioned | NEW: Government introduces a £3,000 reduction in the tax-free dividend allowance from £5,000 to £2,000. |
| Pension allowance | No changes mentioned; as mentioned in the spring Budget the lifetime allowance will rise in line with CPI, to £1.03m for 2018-2019. | No changes to MPPA proposals to reduce it from £10,000 to £4,000. No change to the LTA. Green Paper on Social Care promised. Master Trusts will see their tax registration process amended to align with the Pension Regulator's new authorisation and supervision regime. |
| Capital gains tax | No changes; as previously announced, the 30-day window between a capital gain arising on a residential property and payment will be deferred until April 2020. | No mention of changes to CGT, despite calls from the buy-to-let industry asking for a least a tapered reduction in CGT, on properties owned for 10+ years. |
| Bank levy | Government has committed £36m more of banking fines over the next three years to support armed forces charities and other good causes. | No changes |
| Inheritance tax | No changes mentioned | Still no movement on the £325,000 threshold for IHT |
| Corporation tax | Government will increase R&D expenditure credit from 11 per cent to 12 per cent. | Gov't commits to a R&D tax review with the publication of an Industrial Strategy Green Paper to drive up the level of private investment in science, research and innovation. |
| Tax on savings interest | No change | No change - but beware the £3,000 reduction in Dividend Tax. |
| National Insurance Contribution | Government will delay implementing a series of NICs policies by one year; it confirmed the government will no longer proceed with an increase to the main rate of Class 4 NICs from 9 per cent to 10 per cent. | Class 2 Nics abolition has been confirmed by gov't. Main rate of class 4 Nics will rise from 9 per cent to 10 per cent in April 2018, and to 11 per cent in 2019. |
| Stamp Duty Land Tax | New: reduction of upfront costs for first-time buyers by removing SDLT on properties up to £300,000 nationally and for London and the South East, the first £300,000 of properties worth up to £500,000 | |
eleanor.duncan@ft.com
