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Budget Watch 2020

Budget Watch 2020

Real estate

Find out what the Budget means for the real estate sector.

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Watch this space

19% CT rate to stay

Announced in speech to the CBI annual conference on 18 November 2019 (as an election pledge by Boris Johnson) that the planned corporation tax reduction from 19% to 17% will be put ‘on hold’. The planned reduction to 17% from 1 April 2020 has already been legislated for in section 46 Finance Act 2016. Effective date: 1 April 2020

Entrepreneurs' Relief changes

Articles in Times and Financial Times in January 2020 suggesting that changes may be made to restrict the availability of ER. No further details. Effective date: not known

IR35 / off-payroll working

HM Revenue and Customs has published draft secondary legislation relating to the reform of the off-payroll working rules. Effective date: 6 April 2020

Digital services tax

The government is introducing a new 2% tax on the revenues of search engines, social media platforms and online marketplaces which profit from UK users. Effective date: 1 April 2020.

CGT payment window

30 day payment window for CGT on disposals of residential property by UK resident individuals and trustees. Effective date: 6 April 2020.

Increase to NICs threshold

Conservative election pledge to increase the threshold at which taxpayers start to pay NICs to £9,500. Effective date: not known

Non-resident corporate landlords

Non-resident corporate landlords will be subject to corporation tax, rather than income tax, on their UK property income. Effective date: 6 April 2020.

VAT on management fees

Changes to VAT exemption for management of special investment funds to reflect recent CJEU decisions. Effective date: 1 April 2020.

DAC 6

New reporting regime for cross-border arrangements which meet one or more hallmarks. Effective date: 1 July 2020 (but also catches arrangements where the first step in implementation was made on or after 25 June 2018).

Principal private residence relief

Final period exemption will be reduced from 18 months to 9 months. Also, the £40k lettings relief will be abolished. Effective date: disposals made on or after 6 April 2020

Editorial

Hannah Manning

"Recent statements from the Government have fuelled speculation that entrepreneur's relief may be reformed or abolished. Will the Chancellor axe the relief entirely or respond to pressure from owner managed and VC-backed businesses to keep it, perhaps in a more targeted form?"

Hannah Manning
Cathryn Vanderspar

Cathryn Vanderspar

"With changes already coming in on taxation of non-resident corporate landlords and a 3% SDLT surcharge mooted for purchases by non-residents of residential property, the real estate industry will be watching carefully to see what other measures could affect it, as the government aims to balance its books, reduce house price costs and speed up home delivery. Mansion tax, progressive CGT and IHT changes have all been floated again, but with a new Chancellor the balls will be back in the air. Hopefully, some of the tax reliefs the industry is seeking elsewhere will be given a fair hearing."

Russell Warren

"The recent government green light for the HS2 project raised interesting climate change questions. Perhaps we could expect to see the Budget addressing these through further environmental taxes."

Russell Warren

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Editorial board

Read Kulsoom Hadi Profile
Kulsoom Hadi
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Aimee Hutchinson
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Hannah Manning
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Tom Margesson
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Claire Prentice
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Ian Zeider
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