Here is a summary of all the Budget 2017 proposals affecting mainly small and mediums sized businesses and private clients:
- Offshore property developers: all profits arising on or after 8 March 2017 from trading in and developing land in the UK will be taxed in the UK.
- Substantial Shareholding Exemption: new rules will remove the investing company requirement within the Substantial Shareholdings Exemption, and provide a more comprehensive exemption for companies owned by qualifying institutional investors.
- Loss relief reform: the amended rules a) give all companies more flexibility by relaxing the way in which they can use losses arising on or after 1 April 2017 when they are carried forward – these losses will be usable against profits from different types of income and profits of other group companies and b) restrict the use of losses carried forward by companies so that they can’t reduce their profits arising on or after 1 April 2017 by more than 50% – this restriction will apply to a company or group’s profits above £5 million – carried forward losses arising at any time will be subject to the restriction
- Tax treatment of appropriations to trading stock: new proposals will remove the ability of businesses with loss-making capital assets to obtain an unfair tax advantage by converting those losses into more flexible trading losses. The changes will take immediate effect from Budget on 8 March 2017.
- Corporation tax rate has changed from 20% to 19% effective 01 April 2017
- Income Tax charge and rates: tax year 2017 to 2018 will see 3 distinct groups of rates: the ‘main rates’, which will apply to ‘non-savings, non-dividend’ income of taxpayers in England, Wales and Northern Ireland, the ‘savings rates’, which will apply to savings income of all UK taxpayers, and the ‘default rates’, which will apply to a very limited category of income taxpayers that will not fall within the above 2 groups, made-up primarily of trustees and non-residents (details here)
- Dividend allowance reduction: the 0% tax allowance for dividend income will be reduced from £5,000 to £2,000 from April 2018 ()
- EIS and SEIS: the rights to convert shares from one class to another will be excluded from being an arrangement for the disposal of those shares within the no pre-arranged exits requirements for the EIS and SEIS for shares issued on or after 5 December 2016.
………more to follow