Advice

Key 2019/20 UK Tax Changes for websters Sydney Clients

Personal Tax

  • Personal allowance will increase from £11,850 to £12,500.
  • Individuals (other than Scottish residents) will only be liable to higher rate tax if their total income exceeds £50,000 (before the personal allowance).
  • For Scottish residents, the higher rate will apply if an individual’s total income exceeds £43,430. The higher rate in Scotland is 41%, compared to 40% in the rest of the UK.
  • The finance costs (including mortgage interest) restriction for residential rental properties will increase to 50%. This means that 50% of the interest will be set against the rental profits, with the other 50% being an income tax reducer at 20%. This will affect higher and additional rate taxpayers.

Capital Gains Tax (CGT)

  • CGT Annual exempt amount will increase from £11,700 to £12,000.
  • Non-UK residents will be subject to UK CGT on all UK land disposals. A non-resident CGT return must be submitted to HMRC within 30 days of completion, whether or not a gain is made.
  • Entrepreneurs Relief –
  • the minimum period in which an individual must meet the conditions to qualify for the relief will be extended from 12months to 24months.
  • From 29 October 2018 to add to the 5% shareholding and voting rights tests, the individual must also hold either 5% of a) distributable profits and assets on a winding up or b) 5% of the sale proceeds were the whole share capital of the company to be sold at that point, to qualify. If a shareholding is diluted below 5% due to a relevant share issue, can elect to crystallise the gain at that point by deeming a disposal and acquisition of the shares. This will allow ER to be claimed up to the point of dilution.

Business Tax

  • Capital Allowance special rate will reduce from 8% to 6%

Stamp Duty Land Tax

  • From 1 March 2019, a SDLT return must be filed and tax paid within 14 days after the effective date, reducing from 30 days.