Budget 2016 – what was missing
Stamp Duty Land Tax (SDLT) – there have been some pretty loud calls for this to be reformed, especially with recent evidence of first time buyers struggling to get on the ladder due to the SDLT burden. The 3% surcharge on second home owners has done little to dampen buyers’ appetite, raising £670m in taxes since introduction earlier this year. We thought some changes were in the air but perhaps not.
Inheritance Tax (IHT) – another tax which many see as a ‘double-tax’ whammy and which has seen increased calls for it to be scrapped. With the effective threshold now at £1m for couples passing on estates containing property, there is still scope to tinker with the threshold or reduce the rates but not today.
Further reductions to corporate tax – with President-elect Donald Trump hinting that he is keen to reduce US tax to 15%, a reduction to this level was not entirely unexpected, given the Prime Minister has said she wants the UK to have the lowest tax rate in the G20. It will reduce to 17% but no further for the time being.
No reductions in VAT, despite calls for a temporary reduction to 17.5%
Property interest restrictions – the manner in which the tax relief applies as a tax reducer has adverse impacts on the overall tax rate, leading to tax rates at above the additional rate of 45%. No changes here.