Autumn Statement expert view: The ICAEW
It would seem that the Chancellor does not like private landlords.
In the Summer Budget he announced a restriction on tax relief on interest on buy-to-let mortgages, relief will be at just 20 per cent in future phased in over four years from 2017.
In the Autumn Statement two measures will particularly impact buy-to-let investors and second home owners:
From 1 April 2016 the stamp duty land tax (SDLT) will be 3 percentage points higher than the standard SDLT rates on purchases of additional residential properties with a starting band of £40,000. This additional charge will apply to buy to let properties and second homes.
The second measure is the requirement that from April 2019 capital gains tax due on the sale of a residential property will have to be paid within 30 days of completion. A similar regime is already in place for the sale of residential property by a non UK resident. Draft legislation will be published in 2016 for consultation.
These measures coupled with an expected increase in the cost of borrowing for buy to lets will be unwelcome news to potential landlords but may give some hope to first time buyers.
Meanwhile, when it comes to IHT, there were a couple of things hidden away in the document. One was on deeds of variation
Over the summer the government collected evidence using “Survey Monkey” on the use of deeds of variation on Wills. After collating the evidence the government has decided not to make any changes but their use will continue to be monitored.
Another referred to pensions. It said legislation will be introduced with retrospective effect back to deaths on or after 6 April 2011 to ensure there is no charge to inheritance tax on funds designated for drawdown by a pension scheme member before their death but not actually drawn at the time of death.
Sue Moore is technical manager, private client, tax faculty for the Institute of Chartered Accountants in England and Wales
