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Autumn 2017 Budget highlights
Chancellor Philip Hammond has abolished stamp duty for most first-time buyers in his Autumn Budget.
In his Budget speech to Parliament he offered few surprises or unexpected announcements, but said he was abolishing stamp duty for all first-time buyer purchases up to £300,000 with immediate effect.
“To ensure that this relief also helps first time buyers in very high price areas like London,” he said “it will also be available on the first £300,000 of the purchase price of properties up to £500,000. Meaning an effective reduction of £5,000.”
The relief will not apply for purchases of properties worth over £500,000. According to Treasury estimates, this means that 95% of first-time buyers that pay SDLT will benefit, and 80% of first-time buyers will pay no stamp duty at all.
The Chancellor announced that local authorities will be able to increase the council tax premium for empty homes from 50% to 100%. The change is designed to encourage owners of empty homes to bring their properties back into use.
Enterprise Investment Schemes
The Chancellor said the Government was publishing its ‘Action Plan’, to unlock over £20 billion of new investment in UK scale-up businesses.
This includes a new investment fund in the British Business Bank, seeded with £2.5 billion of public money, with the intention to float or sell once it has established a track record.
Under the Plan, the Government will plan to encourage more investment in knowledge-intensive companies under the Enterprise Investment Scheme and VCT (venture capital trust) scheme.
This means the government will legislate to:
- Double the limit on the amount an individual may invest under the EIS in a tax year to £2 million from the current limit of £1 million, provided any amount over £1 million is invested in one or more knowledge-intensive companies
- Raise the annual investment limit for knowledge-intensive companies receiving investments under the EIS and from VCTs to £10 million from the current limit of £5 million. The lifetime limit will remain the same at £20 million
- Allow knowledge-intensive companies to use the date when their annual turnover first exceeds £200,000 in determining the start of the initial investing period under the permitted maximum age rules, instead of the date of first commercial sale
The changes will have effect on and after 6 April 2018.
Income tax and National Insurance
The tax-free personal allowance on income tax will rise to £11,850 in April 2018 and the higher-rate tax threshold will increase to £46,350
This Government says it remain committed to raising the personal allowance to £12,500 and the higher rate threshold to £50,000 by 2020.
The Marriage Allowance allows taxpayers to transfer up to 10% of their unused personal allowance to their partner, reducing their tax bill by up to £230 a year in 2017-18. The government will now allow claims in cases where a partner has died before the claim was made. These claims will be able to be backdated by up to 4 years.
The government will publish a consultation in 2018 on how to make the taxation of trusts “simpler, fairer, and more transparent”.