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Stamp Duty Land Tax (SDLT) first-time buyers relief

…will be extended in England and Northern Ireland to apply to all first-time buyers purchasing residential property worth up to £500,000 through a qualifying shared ownership scheme. The relief will also apply to shared ownership property buyers who have already paid SDLT on the initial equity stake and rental amount since the introduction of the relief on 22 November 2017. They will have a year to make a backdated claim for the relief. This measure will be effective from 29 October 2018.

Currently lettings relief can be claimed by individuals who let out a property that is, or has in the past been, their main residence. From April 2020, the government will reform lettings relief so that it is only available to individuals in shared occupancy with a tenant.

Currently, the final period exemption means that people do not have to pay CGT on gains made in the final 18 months of ownership. From April 2020, the exemption will be reduced to 9 months. There will be no changes to the 36 months final period exemption available to disabled people or those in a care home. 

Individuals who replace their main residence can reclaim the SDLT where the new home was purchased before selling the old, subject to the old residence being sold within 3 years of the new home purchase.

The residence nil-rate band (RNRB) increases to £150,000 from £125,000 from 6 April 2019 and to £175,000 from 6 April 2020; allowing some couples to leave up to £950,000 to future generations free of IHT.

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EIS deferral relief

Capital gains tax arising on the disposal of any type of asset can be deferred by a subscription for EIS shares. To qualify for the relief the investment must be made during a period covering one year before the gain arose and three years thereafter.

The tax on any gain deferred in this way only becomes due on the subsequent disposal of the EIS shares or if the investor ceases to be UK resident within three years of issue of the shares. However, the gain can be deferred again by using the sale proceeds to make another EIS subscription.

There is no limit on the amount that can be invested in EIS shares but only the first £1,000,000 investment in a tax year will be entitled to income tax relief at up to 30% (for 2017-18).

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With effect from 6 April 2016 dividends and bank and building society interest are paid gross

…and, from 6 April 2017 interest payments from OEICs, authorised UTs, investment trusts and peer-to-peer loans are also paid gross. All individual taxpayers (so not trustees) are entitled to a £2,000 dividend allowance (was £5,000 in 2017/18) and to a personal savings allowance of £1,000 (basic rate taxpayer) or £500 (higher ratetaxpayer). On income in excess of these allowances basic rate for dividends is 7.5%, higher rate is 32.5% and additional rate and trust rate is 38.1%. Equivalent income tax rates on savings income are 20%, 40% and 45%.