Myth-busting – Electrical Safety installations Act 202011:19 AM, 3rd August 2020
About 2 weeks ago 82
Property investors are winners and losers in Chancellor George Osborne’s Budget 2012.
Landlords paying tax on rents are likely winners as they will benefit from Osborne hoisting personal allowances for income tax nearer the £10,000 target.
While top-end of the market investors dealing in buying and selling the most expensive homes are the focus of big increases in stamp duty.
Many other taxes remain the same.
Osborne spoke for just under an hour confirming many details leaked to the media over the past few days. The main points of the Budget were:
The controversial 50p top rate of income tax will drop to 45p from April 6, 2013.
“The rate can only be justified if significant sums of money are raised,” said the Chancellor. “HM Revenue & Customs has revealed the rate is causing massive tax distortions.”
The Treasury estimates the tax cut will raise an extra £0.5 billion in tax.
Income tax rates stay the same – but the personal allowance goes up
“ We want to go further and faster,” said Osborne. “I want to announce the largest ever increase in the personal allowance – a £1,100 increase from April 6, 2013 to £9,205 before anyone pays and tax.”
This will slash tax bills by around £220 every year for basic rate taxpayers after stripping out inflation, with 24 million earning less than £100k gaining more money in their pockets.
Capital gains tax
Just one change for the most wealthy property investors. Non-residents owning properties via an offshore company worth more than £2 million will have to pay capital gains tax on disposal.
CGT for landlords selling buy to let properties is unchanged. The Chancellor has previously stated he does not expect to change CGT rules during the life of this Parliament.
Corporation Tax rates for small companies stay the same, but the main rate for larger companies drops by 2% to 24% plus two further on the way to bring the rate to 22% by 2014.
Stamp duty on properties worth £2 million plus owned by a company goes up to 15% with immediate effect, while the general rate of stamp duty on homes worth £2 million or more increases to 7%.
“Will move without notice and retrospectively if stamp duty rules are continued to be broken,” said the Chancellor.
A new tapered system that means when someone in the home earns more than £50,000 will lead to a cut in child benefit of 1% for every £100 earned over the threshold. When some earns £60,000, child benefit is lost.
In response to the Budget speech, Opposition leader Ed Miliband argued: “Millions will be paying more while millionaires pay less. It’s the end of everyone being in it together. Around 14,000 people earn over £1 million each gets a tax cut of over £40,000 for every year.”
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