Autumn Statement 2014 Highlights

Today’s Autumn Statement had some tax surprises. We will work through the details, but here are some highlights:

  • Entrepreneurs’ relief (ER) – from today ER will not be available where a sole trade or partnership is transferred to a related company.  At the same time the corporation relief on any intangibles will be restricted. Where gains are reinvested into an EIS company ER will now be available when the gain comes back into charge.
  • Non-domiciled individuals – the remittance basis charge for non-domiciles who have been resident in the UK for 12 of the past 14 years will increase to £60,000. There will also be a new charge of £90,000 for those who have been resident for 17 out of the past 20 years. The charge for those who are UK resident for seven of the past nine years will remain unchanged. The government are also going to consult on making the election to pay the remittance basis charge apply for a minimum of three years.
  • Diverted profits tax – from 1 April 2015 diverted profits tax will be applied at a rate of 25% to multinational enterprises who make economic profits in the UK and divert these profits from the UK.
  • Stamp duty land tax (SDLT) – the calculation of SDLT on purchases of residential property will change so that rates apply to the portion of the purchase price within each band.  The portion of the transaction value up to £125,000 is charged at a rate of 0%, the portion between £125,001 and £250,000 is charged at a rate of 2%, the portion between £250,001 and £925,000 is charged at a rate of 5%, the portion between £925,001 and £1,500,000 is charged at a rate of 10% and the portion over £1,500,000 is charged at a rate of 12%. These changes will take effect on and after 4 December 2014.
  • Research and Development (R&D) – from 1 April 2015 the ‘above the line’ credit will be increased from 10% to 11% and the SME scheme rate will increase from 225% to 230%.

As we work through the details we will update our website throughout the afternoon so keep watching!