Budget round up
The Chancellor’s Budget delivered on 18 March announced various measures designed to stimulate growth and further development in the property market. Our Property Briefing Note sets out more details, but the headlines affecting our region include:
The Chancellor has announced the Government’s intention to introduce a new form of ISA, known as the Help to Buy: ISA, which is designed to encourage first time buyers to save and help them to achieve the ever increasing cost of that crucial first deposit.
The information released to date indicates that qualifying savers will be eligible for a £50 bonus for every £200 saved which will be paid when the account holder buys their first property. The purchase price for a qualifying purchase is limited to £250,000 (or £450,000 in London). The maximum bonus per person is £3,000 and the minimum is £400. The account is personal, so joint purchasers can have an account each, offering them the opportunity to multiply their bonus against a qualifying purchase.
There will be no minimum monthly savings amounts, but there will be a maximum of £200 per month. It will also be possible to make a one-off initial contribution of £1,000 when opening the account.
In order to open a Help to Buy ISA, an individual must be a first time buyer over the age of 16. Subject to any changes by the new Government, the Help to Buy: ISA is expected to be available from autumn 2015 for a period of 4 years.
Consultation on compulsory purchase regime
On 18 March 2015, the Government launched a new consultation designed to identify means of making the compulsory purchase regime clearer, faster and fairer.
The package of measures being proposed includes:
- updated guidance providing web-based resource;
- encouraging pubic authorities to offer good levels of compensation through private agreement;
- improving the acquiring authority’s powers to enter land in order to survey land and to take possession of the acquired land;
- evaluation of the current remedies available to the courts dealing with High Court challenges; and
- extending the acquiring authority’s powers to override easements and restrictive covenants affecting the acquired land.
The consultation, which only affects England, is available here and interested parties are asked to make their responses by 9 June 2015.
With the end of the current tax year fast approaching, property owners with properties within the scope of the ATED need to get ready to deal with their returns for 2015/16.
The level of charges for 2015/16 is as follow:
|
Property valuation band |
Tax charge |
|
£1,000,001 – £2,000,000 |
£7,000 |
|
£2,000,001 – £5,000,000 |
£23,350 |
|
£5,000,001 – £10,000,000 |
£54,450 |
|
£10,000,001 – £20,000,000 |
£109,050 |
|
Over £20,000,000 |
£218,200 |
For properties over the £2m threshold which are subject to the charge, the deadline for submitting both the return and payment is 30 April 2015. For properties between £1m and £2m, the return is due by 1 October 2015 and payment is due by 31 October 2015.
For property owners which benefit from a relief from ATED, they will need to submit a relief declaration return. Due to the changes required to deal with the introduction of this new return, the deadline for submitting relief declaration returns is 1 October 2015.
If you would like know more about ATED and whether you are affected, please get in touch.
Capital Gains Tax (CGT) reminder for non-residents
Following a consultation which took place last year, the Government has confirmed that, from 6 April 2015, non-UK resident individuals, trusts, personal representatives and narrowly controlled companies will be subject to CGT on gains accruing on the disposal of UK residential property on or after that date.
The Government will also restrict access to Principal Private Residence Relief (PPR) in circumstances where a property is located in a jurisdiction in which a taxpayer is not tax resident. In those circumstances, the property will only be capable of being regarded as the person’s only or main residence for PPR purposes for a tax year where the person meets a 90-day occupation test. If this test is met, it could result in the individual becoming tax resident in the other jurisdiction, with all the tax implications that follow.
If you have any questions about CGT, PPR or how your residence status affects your UK tax position, please let us know.
New portal to tackle water debt
In recent years, water companies have seen a rise in the level of their bad debts as a result of some households failing to pay their water bills.
The situation is, in part, due to the fact that water companies are obliged to provide a service to residential properties, but they have no statutory powers to obtain the details of the individual(s) liable to pay the bill, making recovery very difficult. Also, there is no obligation on the occupier to provide their details to the water supplier when taking up occupation of a property. This is a particular issue in the private rental sector, where average occupancy periods are shorter than in the social housing sector.
In order to attempt to tackle this issue, the Landlord and Tenant Address Portal (or LandlordTAP) has been launched. This new portal will allow residential landlords and their agents to provide a host of information to water companies including:
- the properties in their portfolio or those that they are responsible for managing;
- changes to tenant details, including changes of tenancy; and
- when a property becomes empty.
The launch of this portal coincides with the commencement of legislation (currently limited to Welsh suppliers) which will make landlords liable for the water bills of their tenants if they fail to provide their tenants’ details.
The portal can be found at www.landlordtap.com.
