Tax changes with regards to Mortgate Interest Relief for Landlords
Mortgage interest being restricted for higher rate tax payers from 2017/18 onwards. The amount will be reduced each year – 75% allowed this year, 50% next year, 25% the year after and then nothing.
However Holiday Lets (which meet the Holiday Let criteria) are not affected by this change.
The government has reduced the amount you can put in your pension fund each year from £50,000 to a maximum of £40,000.
This includes contributions from your employer as well as your own personal contributions.
The lifetime limit for your pension fund is now £1,055,000 for 2019/20.
There is now a new capital allowance called Structures Allowance which takes effect from the 29th Oct 2018 at a rate of 2% per annum.
The budget in March 2020 proposes to increase this rate to 3% from the 6th April 2020.
Capital Gains Tax
From the 6th April 2020 CGT will be payable within 30 days of a disposal.
There will be an online form to complete and tax to pay.
You are allowed to use estimates.
This will then need to be entered into your personal self-assessment tax return with the accurate figures and any balance of tax payable is due on the 31st Jan following the end of the tax year.
The 18 months tax free period for CGT is reduced to 9 months from the 6th April 2020
Letting relief is abolished from the 6th April 2020.
If you are non-resident then CGT is payable on residential property on the difference between the value at the 6th April 2015 to the date of disposal.
This now applies to commercial property with the difference between the value on the 6th April 2019 and the date of disposal.
Implementation has now been delayed until 6th April 2021.
Each employee is now allowed a £500 a year allowance for pension advice.
This can be paid by the company the employee works for and is tax free (no Benefit in Kind) as long as the pension advisor is regulated as a IFA (Independent Financial Advisor)
This will reduce from £10M lifetime limit to just £1M on the 6th April 2020
Also the time limit for holding the shares increases from 1 year to 2 yrs.
The 5% holding rule remains
Research & Development Relief
- Small and medium sized companies are able to deduct 225 per cent of qualifying R&D expenditure from taxable profits. This used to be only 200 per cent. Large companies, however, can only deduct 130 per cent.
- At PW Accountants Ltd we are very knowledgeable on this subject and if you would like advice on the topic it is worth calling a member of our team today.
UK Resident Rules Defined
With effect from 6 April 2013 the UK introduces a Statutory Residence Test (SRT) for the first time.
The revised draft legislation (issued on 11 December 2012 and open to comment until 6th February 2013) retains the originally proposed three part test to determine UK residence with a number of additions. <Read more>
Child Benefit Changes
Important change if you or your partner have an individual income of more than £50,000 a year
From 7 January 201 3 if either you or your partner have an individual income of more than £50,000 a year, then the partner with the higher income will have to pay a High Income Child Benefit Charge on some, or all, of the Child Benefit you receive. If these changes apply to you or your partner you should jointly decide whether to stop getting Child Benefit payments,and not have to pay a tax charge, or continue getting Child Benefit payments and declare them for tax purposes. Filling in the Child Benefit claim form also ensures that you are registered to receive National Insurance credits which can help to protect your State Pension. It is therefore really important to fill, in the form if you have a new child in your family even if you do not wish to receive the Child Benefit payments. Part 4 of this claim form lets you tell, us if you want to be paid Child Benefit. <Read More>