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| Personal Announcements
PERSONAL
ANNOUNCEMENTS
PERSONAL ALLOWANCE AND
HIGHER RATE THRESHOLD
The personal allowance will be increased
from £11,000 in 2016/17 to £11,500 in
2017/18.
The higher rate threshold will increase
from £32,000 in 2016/17 to £33,500
in 2017/18. Individuals entitled to a full
personal allowance will not be liable to
higher rate tax until their total income
exceeds £43,000 in 2016/17 and £45,000
in 2017/18.
The NICs upper earnings limit will also
increase to remain in line with the higher
rate threshold.
PROPERTY AND TRADING
INCOME ALLOWANCES
The government will introduce a new
£1,000 allowance for property income and
a new £1,000 allowance for trading income
from April 2017. Individuals with less than
£1,000 of either source of income will no
longer need to declare or pay tax on
that income.
Those with income above £1,000 will be
able to deduct their expenses in the usual
manner or simply deduct the
£1,000 allowance.
FINANCE COSTS RESTRICTION
FOR LANDLORDS
Legislation will be introduced relating to
inance costs on residential properties
incurred on or after 6 April 2017 in order
to ensure that:
•
individual beneiciaries of deceased
persons’ estates are entitled to the basic
rate tax reduction
•
the total income restriction to the tax
reduction applies where the relevant
inance costs or property proits are
higher than the total income
•
the total income is a measure of the net
taxable income after other reliefs
•
any carried forward tax reduction is
given in any subsequent year in which
property income is received, even if
there is no restriction on the deduction
of inance costs in that year, as the loan
may have been repaid.
REFORM OF THE WEAR AND
TEAR ALLOWANCE
As announced at Summer Budget 2015,
the wear and tear allowance is being
abolished from April 2016. Landlords
will be able to deduct the actual costs of
replacing furnishings.
PROFITS FROM TRADING IN
AND DEVELOPING UK LAND
The government is acting to ensure that
there is a level playing ield between
non-UK resident developers of UK property
and UK developers.
The legislation will introduce a standard
set of rules for taxing trading proits
derived from trading in and developing
land in the UK.
It will be introduced from report stage
and will take effect from the date of
introduction. Anti-avoidance rules will take
effect from budget day to counteract any
arrangements put in place.
The new rules will apply even if the
overseas developer has no permanent
establishment in the UK. The proits will be
subject to either income tax or corporation
tax depending upon the business structure
used by the developer.
BAD DEBT RELIEF FOR
PEER-TO-PEER LENDING
Tax relief will be allowable on bad debts
incurred on peer-to-peer loans against
other peer-to-peer income.
EXTENDING FARMERS
AVERAGING PERIOD
Farmers will have the choice of averaging
their proits for income tax purposes over
2 years or 5 years. This was announced
earlier in Autumn Statement 2015 and will
apply from April 2016.
NON-DOMICILE TAXATION
From April 2017 non-UK domiciled
individuals will be deemed UK domiciled if
they have been resident in the UK for 15 of
the past 20 tax years. This was announced
in Summer Budget 2015.
In addition individuals who were born in the
UK and who have a UK domicile of origin
will revert to their UK domiciled status
whilst they are resident in the UK.
The government will also legislate to charge
inheritance tax (IHT) on all UK residential
property indirectly held through an offshore
structure from 6 April 2017.