In delivering his mini-budget 2022 (referred to by the government as its “Growth Plan”), the Chancellor has, on 23 September 2022 announced a wide-ranging series of tax cuts and reforms, with a focus on incentivisation, investment and making Great Britain more competitive on the global stage.
Key real estate related announcements include the following:
0% SDLT residential property band increased
With immediate effect, the threshold on which SDLT is paid for purchases of residential property will be doubled to GBP250,000. This may have a significant impact for those purchasing multiple homes in a single transaction where a claim for multiple dwellings relief could be made.
SDLT relief for first-time buyers has also been increased – both the threshold at which SDLT starts to be paid (increased from GBP300,000 to GBP425,000) and the maximum value of a property on which the relief can be claimed (increased from GBP500,000 to £625,000).
Planned corporation tax increase cancelled
The planned corporation tax increase to 25%, which was due to take effect from April 2023, has been cancelled. As a result, the UK corporation tax rate will remain at 19%.
Basic rate of income tax cut
The 1% cut to the basic rate of income tax will be brought forward, with the effect that the basic rate will be 19% from April 2023. Whilst this hasn’t been confirmed yet, this may be relevant to withholding tax (including payments under the Non-Resident Landlord Scheme), because the UK’s withholding rates generally operate by reference to the basic rate of income tax.
Time-limited tax incentives for businesses in designated sites
New investment zones will be introduced across the UK. Specified sites within these zones will benefit from a number of tax incentives over ten years, including business rates relief, enhanced capital allowances, and SDLT relief for commercial purchases, and for purchases of land or buildings for new residential development.
Annual investment allowance permanently increased
The government has announced that it will make permanent the temporary GBP1 million level of the annual investment allowance (AIA), which was due to expire after 31 March 2023.