Yesterday, George Osborne released his first Autumn Statement since the election. The Autumn Statement and Spending Review were combined and without the influence of the Liberal Democrats, Mr Osbourne was more free to implement his own party’s policies.
From a tax perspective, there were only a relatively minor amount of changes introduced, although they are mostly subject to consultation. The main areas that might affect the offshore world are as follows:
- From 1 April 2016, an additional 3% above current Stamp Duty Land Tax (‘SDLT’) rates will apply on the purchase of residential properties as buy-to-let or second properties. There are to be certain exemptions, including corporates or funds making significant investment in residential property. The government will consult on the policy detail.
- It is proposed that the SDLT filing and payment process be changed with a reduction in the filing and payment window from 30 days to 14 days. The government is to consult further on this.
- From April 2019, a payment of account of any Capital Gains Tax (‘CGT’) on the disposal of residential property will be required within 30 days of completion. This brings the sale of residential property in line with sales by non-residents; however in some non-resident cases, they can have a further 10 – 22 months to pay the tax if already a UK taxpayer. Draft legislation for consultation will be published in 2016.
- In a crackdown on tax avoidance, a penalty of up to 60% of the tax due is to be added for arrangements considered abusive under the General Anti-Abuse Rule (‘GAAR’), together with changes to tackle marketed avoidance schemes. It is of note that HMRC have not yet reported any cases going to the GAAR panel.