The budget for landlords
Chancellor Rishi Sunak delivered his Budget earlier this afternoon and EQ’s Property Taxperts have briefly summarised the main issues for landlords.
The good news:
- No apparent increase in Capital Gains Tax (CGT)
- Income tax, NIC rates frozen along with personal allowances for 2022/23
- No increase in Corporation Tax for smaller companies with profits of £50,000 or less with effect from 1 April 2023
- Freeze in current Corporation Tax rates up to 31 March 2023
- Inheritance Tax (IHT) thresholds to remain up to 5 April 2026 (at least)
- Pension limits remain unaffected
- The Coronavirus Job Retention Scheme has been extended until September with no changes to terms for employees. From July, 10% employer contribution added and 20% for August and September
- The £20-per-week boost to Universal Credit will be extended until the end of September
The bad news:
- Corporation Tax rise to 25% with effect from 1 April 2023 for larger companies with profits of more than £250,00
- Tapered increase in Corporation Tax, with effect from 1 April 2023 for those companies with profits between £50,000 and £250,000
- Further anti-avoidance legislation (a detailed review of Government press releases in this respect will be available later today)
- Stamp Duty relief was extended in England, but as announced in the Scottish Budget, the Scottish Government did not extend the relief to LBTT in Scotland
Given the bad news for landlords in previous Budgets, today’s Budget has a much lower impact for landlords, which is no doubt welcome news. Whilst the Corporation Tax rise is disappointing, the rate remains low and may simply mean that corporate landlords reconsider their remuneration and investment planning. For landlords intending to sell properties, the retention of Capital Gains Tax annual exemption limit, and no rise in CGT rates is welcome news, along with the incentives for first time buyers.
Head of EQ Property Tax, David Morrison, commented, “The Budget was perhaps most significant for the freeze in certain areas such as CGT, IHT and Income Tax. Whilst Corporation Tax rises may prove challenging for some, nevertheless business owners will have some time to plan for these changes. EQ’s property tax team will be happy to discuss matters with any SAL member and we will provide further updates on our website – www.eqtaxperts.com – over the coming days.
Alternatively, please contact us at email@example.com and one of our Property Taxperts will get in touch with you. More details of any relevant anti-avoidance rules affecting landlords, will follow.