Today saw the Chancellors Autumn Statement, which now seems to fall traditionally in early December!
There were few changes in the world of tax, but the limited announcements that were made do carry some significance. Details are scant at present as the usual draft legislation and explanatory notes are not due for publication until 10 December this year.
However, we have outlined the main areas of focus for ourselves and our clients below. We would be happy for those potentially affected to contact us to discuss their circumstances and how we can help them.
Capital gains tax charges for non-resident
As expected, a capital gains tax charge is to apply to future gains made by non-residents disposing of UK residential property. This will come in from April 2015, and the specifics are yet to be announced. A consultation on how to introduce this will be published in early 2014 and it will be important to understand whether any “grandfathering” provisions apply, or whether it would make sense to take action to re-base a property prior to the changes coming into force.
Capital gains tax main residence relief
Capital gains tax charges are not typically incurred on sale of a property which is an individual’s only or main home. There is a helpful extension to this relief which is intended to cover a period after an individual has moved out of a property but has not yet sold it. This can also be helpful where an individual has several residences, but will be watered down from 6 April 2014 as the final period exemption will be reduced from 36 months to 18 months.
Partnerships, LLPs
Following the partnerships review announced in last year’s Autumn Statement, measures will now be introduced to affect “mixed” partnerships, with both individual and non-individual (typically a corporate) partners. The intention is to counter-act the allocation of profits to corporate and/or individual partners to secure a tax advantage. As expected, the changes will take effect from 6 April 2014, although we are told that anti-avoidance rules concerning tax-motivated profit allocations will come into force from 5 December 2013. Again, further detail will follow on 10 December.
