TAXFAX 2016/17. Private clients. Corporate and business. Property. Employment

Transcription

1 2016/17 TAXFAX

2 TAXFAX 2016/17 Prvate clents Allowances and relefs 2 Indvduals - Income Tax rates and bands 3 Trusts - Income Tax rates 4 Penson contrbuton relefs 4 Captal Gans Tax ( CGT ) 5 Inhertance Tax ( IHT ) 6 Tax savng nvestments 7 Indvdual Savngs Accounts ( ISAs ) 7 Corporate and busness Corporaton Tax and Dverted Profts Tax 8 Research and Development ( R&D ) tax credts 8 Patent box 8 Captal allowances 9 Value Added Tax ( VAT ) 10 Property Stamp Duty and Stamp Duty Land Tax 11 Annual Tax on Enveloped Dwellngs ( ATED ) 12 Employment Benefts n Knd ( BIK ) 13 Tax free mleage rates 14 Employee share ncentves 14 Natonal Insurance Contrbutons ( NIC ) 15 Changes from Aprl 2017 and Aprl

3 Allowances and relefs 2016/ /16 Notes Personal allowance Born after 5 Aprl ,000 10,600, v Born before 6 Aprl ,000 10,660,, v 10% of the personal allowance can be transferred between spouses/ cvl partners where nether partner s a hgher rate tax payer v Marred/cvl partner s allowance At least one partner born before 6 Aprl ,355 8,355, v Mnmum marred/cvl partner s allowance 3,220 3,220, v Savngs allowance for basc rate taxpayer 1,000 n/a Savngs allowance for hgher rate taxpayer 500 n/a Dvdend allowance 5,000 n/a Blnd person s allowance 2,290 2,290 Rent-a-room - maxmum 7,500 4,250 Maxmum golden handshake 30,000 30,000 Hgh ncome chld beneft charge threshold 50,000 50,000 v Notes v v Reduced by 1 for every 2 of ncome over 100,000 Age allowance reduced to personal allowance by 1 for every 2 over 27,700 Avalable to persons born before 6 Aprl Allowance gven at 10% Reduced to the mnmum allowance by 1 for every 2 over 27,700 Apply personal allowance reducton frst Non-resdents may not be enttled to personal allowances n certan crcumstances Charge of 1% of the beneft per 100 of adjusted net ncome over 50, % of the beneft when adjusted net ncome reaches 60,0000 2

4 Indvduals - Income Tax rates and bands Bands 2016/ /16 Startng rate lmt* 5,000 5,000 Basc rate band 0-32, ,785 Hgher rate band 32, ,000 31, ,000 Addtonal rate band Over 150,000 Over 150,000 *Not avalable where utlsed by taxable non-savngs ncome 2016/ /16 Rates Basc rate 20% 20% Hgher rate 40% 40% Addtonal rate 45% 45% Savngs ncome Startng rate for savngs ncome Dvdend ordnary rate for dvdends otherwse taxable at the basc rate Dvdend upper rate for dvdends otherwse taxable at the hgher rate Dvdend addtonal rate for dvdends otherwse taxable at the addtonal rate 0% 0% 7.5%*** 10% (0%**) 32.5%*** 32.5% (25%**) 38.1%*** 37.5% (30.6%**) **Effectve rate of tax where dvdends qualfed for 1/9 th non-repayable tax credt ***After accountng for dvdend allowance Bank nterest - from Aprl 2016, banks wll cease to deduct basc rate tax at source 3

5 Trusts - Income Tax rates 2016/ /16 Dvdends Other Dvdends Other Interest n possesson trusts and up to 1,000 for dscretonary and accumulaton and mantenance trusts 7.5% 20% 10% (0%*) 20% On ncome for non-nterest n possesson trusts over 1, % 45% 37.5% (30.6%*) *Effectve rate of tax where dvdends qualfed for 1/9 th non-repayable tax credt Trusts where the settlor or spouse/cvl partner retans an nterest are taxed as the ncome of the settlor Trusts for the vulnerable can be taxed as benefcary's ncome 45% Penson contrbuton relefs 2016/ /16 Notes Lfetme allowance 1m 1.25m Annual allowance 40,000 Notes Pre 9 July 80,000 Post 8 July 0,, v, v, v v v v Subject to any regstraton of protected penson funds, aggregate retrement benefts n excess of the lfetme allowance of 1m may be subject to the lfetme allowance charge of 55% of the surplus beneft Personal contrbutons cannot exceed 100% of earnngs or, when aggregated wth employer contrbutons, the annual allowance, plus unused allowances carred forward from the prevous three years (N.B. the 2013/14 annual allowance was 50,000) Contrbutons n excess of the annual allowance are taxed at up to 45% Those who flex-access ther defned contrbutons penson funds are subject to the money purchase annual allowance of 10,000 (wth no carry forward) n respect of contrbutons to defned contrbuton penson schemes From 2016/17 the annual allowance wll be reduced by 1 for every 2 of ncome from all sources over 150,000 to a mnmum of 10,000 Up to 3,600 p.a. gross can be pad nto pensons rrespectve of earnngs to age 75 Any unused annual allowance from pre 9 July 2015 s carred forward to post 8 July 2015 subject to a maxmum of 40,000 4

6 Captal Gans Tax ( CGT ) Rates for ndvduals and trusts 2016/ /16 Basc and standard rate taxpayers 10%* 18% Hgher and addtonal rate taxpayers 20%* 28% Trusts and personal representatves 20%* 28% Gans qualfyng for Entrepreneurs Relef 10% 10% * An 8% surcharge apples on gans on dsposals of resdental property and carred nterest. Exemptons and relefs Annual exempton Indvduals Trusts Entrepreneurs Relef Maxmum lfetme allowance Long-term nvestors lfetme allowance 11,100 5,550 10m 10m 11,100 5,550 10m n/a Exempt assets nclude cars, foregn currency and chattels worth less than 6,000 Marred couples/cvl partnershps (unless permanently separated) Transfers between spouses/cvl partners gve rse to no gan and no loss and the recpent s deemed to have acqured the asset at the orgnal cost Man resdence relef Man resdence relef exempts gans on the famly home from CGT. Addtonally the fnal 18 months of ownershp qualfes for exempton (where the resdence has been a person s man home at some tme) From 6 Aprl 2015 ndvduals, or ther spouse/cvl partner, who clam man resdence relef on a property whch s not stuated n the country where they are tax resdent wll need to stay n that property for at least 90 mdnghts per year for t to be elgble for relef Non-resdents CGT From 6 Aprl 2015 non-uk resdents are subject to CGT on dsposals of UK resdental property, on the ncrease n the value from 6 Aprl 2015 only Returns have to be fled wth HMRC wthn 30 days of conveyance 5

7 Inhertance Tax ( IHT ) Rates and bands On death 2016/ /16 Notes Nl rate band 1-325,000 0% 0% Over 325,000 40% 40% Notes Nl rate band for estate of survvng spouse s ncreased by the percentage of the nl rate band unutlsed by the predeceased spouse Tax rate reduces to 36% when at least 10% of net chargeable estate s left to charty Lfetme gfts to An ndvdual - ntally not chargeable and fully exempt after 7 years Relevant property trusts - excess over avalable nl rate band taxable at 20% Death wthn seven years of lfetme gfts - tax on value gfted s payable at death rates subject to taper relef (and credt for any lfetme taxes pad): Years Over 7 Taper relef 0% 20% 40% 60% 80% 100% Man exemptons Spouse/cvl partner - both UK domcled (or transferor non-domcled) unlmted Gft from UK domcled to non-uk domcled spouse/cvl partner 325,000 (An electon s avalable for the non-domcled spouse/cvl partner to be treated as UK domcled for IHT purposes) Total annual gfts per donor 3,000 Small gfts per donee not exceedng 250 Marrage/cvl partnershp gfts by - parent 5,000 - other 'relatve' 2,500 - other 1,000 Regular gfts out of surplus ncome UK chartes plus those n the EU, Norway and Iceland, and poltcal partes n the UK unlmted unlmted Busness and agrcultural property relef Can be avalable at 50% or 100% on qualfyng busness or agrcultural property Payment and flng date 6 months after the end of the month of the death/chargeable transfer 6

8 Tax savng nvestments 2016/17 and 2015/16 Subscrptons for shares n qualfyng Enterprse Investment Scheme ( EIS ) companes, Seed Enterprse Investment Scheme ( SEIS ) companes, Venture Captal Trust ( VCT ) companes, and Socal Investment Tax Relef ( SITR ) enterprses beneft from the followng tax relefs: Income Tax relef CGT status on sale CGT deferral Maxmum qualfyng nvestment Holdng perod to retan tax relef EIS 30% Exempt Yes 1,000,000 3 years SEIS 50% Exempt Up to 50% exempt 100,000 3 years VCT* 30% Exempt No 200,000 5 years SITR 30% Exempt Yes 1,000,000 3 years * Investors pay no tax on dvdends receved Indvdual Savngs Accounts ( ISAs ) 2016/ /16 Notes Cash and shares combned lmt 15,240 15,240 Junor ISA 4,080 4,080, Help to buy ISA 2,400 2,400 Notes Wthdrawals that are pad back wthn same tax year do not count towards annual lmt Avalable to chldren not enttled to a Chld Trust Fund Frst tme buyers over 16: maxmum ntal depost 1,000 and maxmum monthly savngs 200. The government wll boost savngs by 25% up to a maxmum of 3,000 per person on purchase of frst home up to 450,000 n London or 250,000 outsde London 7

9 Corporaton Tax and Dverted Profts Tax 2016/ /16 Note Corporaton Tax - all profts and gans 20% 20% Dverted Profts Tax 25% 25% Note Reducton n corporaton tax rate to 19% from 1 Aprl 2017, reducng further to 17% from 1 Aprl 2020 Apples to profts of large enttes dverted from the UK as a result of an avoded permanent establshment or transactons whch lack economc substance Research and Development ( R&D ) tax credts 2016/ /16 Notes SME enhanced deducton scheme SME cash credt for R&D loss surrendered 130% 14.5% 130% 14.5% Large company above the lne credt 11% 11% Notes Addtonal (enhanced) tax deducton avalable for qualfyng R&D expendture Taxable credt avalable on qualfyng R&D expendture Patent box Effectve rate of tax on qualfyng profts 2016/17 11% 2015/16 12% Note Note New regme to operate from 1 July 2016; lower rate dependant on, and proportonal to, the extent of R&D expendture ncurred Exstng regme avalable untl 2021 f opt n electon made by 30 June

10 Captal allowances 2016/ /16 Notes Plant and machnery Annual nvestment allowance Long lfe assets (at least 25 years) and ntegral features Other assets Frst year allowances R&D, enterprse zone (qualfyng zones), energy-savng technologes (ncludng cars), water effcent technology, brand new zero-emsson goods vehcles, busness premses renovaton Cars CO 2 emssons (g/km) 75 or less over % 8% 18% 100% 8% 18% 100% 100% 100% 18% 8% 100% 18% 8%, Intangbles ncludng goodwll and ntellectual property but excludng purchased goodwll and customer related ntangble assets acqured after 8 July Allowance n lne wth accountng deprecaton subject to a mnmum of 4% p.a. Notes To 31 December 2015 maxmum 500,000 p.a. From 1 January 2016 maxmum 200,000 p.a. reducng balance bass leased cars wth CO 2 emssons n excess of 130g/km - 15% of lease charges are ds-allowed 9

11 Value Added Tax ( VAT ) Standard rate 20% Reduced rate 5% 2016/17 and 2015/16 VAT thresholds Regstraton requred: UK establshed busnesses Non-UK establshed busnesses If annual taxable turnover s: More than 83,000 (1 Aprl 2016) n/a Deregstraton s possble Less than 81,000 (1 Aprl 2016) Dstance sellng (goods suppled from other EU countres to UK prvate consumers) Elgble to use Cash Accountng Scheme Elgble to use Annual Accountng Scheme More than 70,000 (n a calendar year) Less than 1,350,000 Less than 1,350,000 Elgble to use Flat Rate Scheme Less than 150,000 Car fuel scale charges (where there s prvate use of fuel) Bands based on CO 2 emssons wth VAT charges for a 3 month perod of between 26 and

12 Stamp Duty and Stamp Duty Land Tax Chargeable: Acquston of land, property, shares and nterests n partnershps Stamp Duty Land Tax 2016/17 and 2015/16 Property purchased n England, Wales and Northern Ireland Resdental (purchase prce/premum payable) Rate* 0% 2% 5% 10% 12% Up to 125, ,001 to 250, ,001 to 925, ,001 to 1,500,000 Over 1,500,000 15%** Enveloped propertes over 500,000 3% supplement from 1 Aprl 2016 to resdental rates for second resdental property Non-resdental/mxed use (purchase prce/premum payable) Rate** Rate* Up to 16 March 2016 From 17 March % 1% 3% 4% Up to 150, ,001 to 250, ,001 to 500,000 Over 500,000 0% 2% 5% Leasehold rent transactons (net present value of rent) Up to 150, ,001 to 250,000 Over 250,000 Resdental Rate* 0% 1% Up to 125,000 Over 125,000 Non-resdental/mxed use Rate* 0% 1% 2% Up to 150, ,001 to 5,000,000 Over 5,000,000 * Tax rate charged on part of purchase prce wthn each band ** Tax rate applcable on whole purchase prce 11

13 Annual Tax on Enveloped Dwellngs ( ATED ) For propertes wthn the ATED regme (.e. manly propertes owned by companes and valued n Aprl 2012 at over 500,000) the ATED perod runs from 1 Aprl to 31 March each year, and payment s due by 30 Aprl followng the begnnng of each ATED perod The ATED s chargeable at a flat rate f a property falls nto a specfc band as follows: 2016/17* 2015/16 Resdental property value Annual charge Annual charge Up to 500,000 n/a n/a 500,001-1,000,000 3,500 +CPI n/a 1,000,001-2,000,000 7,000 +CPI 7,000 2,000,001-5,000,000 23,350 +CPI 23,350 5,000,001-10,000,000 54,450 +CPI 54,450 10,000,001-20,000, ,050 +CPI 109,050 Over 20,000, ,200 +CPI 218,200 Apples on dsposal of a property that has been wthn ATED on the ncrease n value attrbutable to the perod wthn ATED and subject to the ATED charge. * Not yet announced ncrease lkely to be n lne wth Consumer Prce Index ( CPI ) Once released, detals wll be avalable at 12

14 Benefts n Knd ( BIK ) 2016/17 (2015/16) General rule Amount assessable s cost (ncludng VAT) to employer Exemptons Employee relocaton expenses up to 8,000 Incdental expenses of busness trps per nght up to 5 n the UK / 10 outsde the UK Staff partes not exceedng 150 per employee p.a. One moble phone per employee Beneft of occupyng overseas holday home owned by sngle purpose company Qualfyng trval BIK costng up to 50 from 6 Aprl 2016 Loans Up to 10,000 ( 10,000): no beneft Over 10,000 ( 10,000): taxable on deemed nterest at 'offcal rate' on whole amount Specal rules apply for some foregn currency loans Lvng accommodaton Greater of rateable value or rent and, f after 22 Aprl 2009, premum for lease of 10 years or less pad by employer For accommodaton where cost to employer was over 75,000, rateable value plus 'offcal rate' on excess of cost to employer over 75,000 'Offcal rate' 3% from 6 Aprl 2015 Prvate use of company car: scale benefts Beneft based on 7% (5%) to 37% of lst prce, dependent on CO 2 emssons Lst prce ncludes certan accessores, reduced for captal contrbutons up to 5,000 To 5 Aprl 2021, supplement of 3% for most desel cars, to a maxmum charge of 37% Electrc cars 7% charge Cars wthout approved CO 2 emssons are taxed accordng to engne sze Specal rules apply to LPG and dual fuel cars, cars over 15 years old at the end of the tax year and to the value of accessores Car fuel beneft The fuel beneft s a percentage of 22,200 ( 22,100). The percentage s the same as used for the company car beneft* Prvate use of company vans Vans avalable for prvate use: van beneft charge ( VBC ) 3,170 ( 3,150) Further charge of 598 ( 594) for prvate use of fuel Zero emsson vans beneft charged at 20% of VBC *The full table for the car fuel beneft can be vewed on our webste: 13

15 Tax free mleage rates 2016/17 and 2015/16 Employee's own car Annual busness mleage up to 10,000 mles Each addtonal mle over 10,000 mles Each qualfyng passenger Motorcycle Cycle Rate per mle 45p 25p 5p 24p 20p Employee share ncentves 2016/17 and 2015/16 Share ncentve plan - up to 3,600 of free shares p.a. plus two matchng shares for each partnershp share bought by employee (maxmum free and matchng shares 7,200 p.a.). Open to all employees on smlar terms. No tax or NI charges on grant or exercse f retaned n plan for 5 years. Increase n value after wthdrawal from plan charged to CGT Enterprse Management Incentves ( EMI ) - 250,000 of share optons offered per employee. Currently the maxmum s 3m per company. No tax or NI on grant or exercse unless granted at undervalue. Increase n value on dsposal chargeable to CGT Broadly, EMI shares acqured after 6 Aprl 2012 may qualfy for Entrepreneurs Relef wthout the requrement for a 5% holdng; the 12 month ownershp perod wll commence on grant rather than exercse date Other approved share ncentve schemes - For Save As You Earn the monthly lmt that employees can save and apply towards the purchase of shares s 500 Unapproved share opton schemes - no lmt, full dscreton over qualfyng employees. No tax or NIC on grant of optons lastng 10 years or less. Income tax charge on value when exercsed plus (n certan crcumstances) NI charge on exercse of optons 14

16 Natonal Insurance Contrbutons ( NIC ) Class 1 prmary employees 2016/17 and 2015/16 Total weekly earnngs - contracted n up to 155 over 155 to 827*** over 827*** on excess Class 1 secondary employers Total weekly earnngs - contracted n up to 156 over 156 nl 12% 2% nl 13.8% Contracted out rates and bands for employer and employee NICs dffer Class 1A employers only Class 1B employers only Class 2 flat rate for self employed 13.8% on taxable benefts 13.8% on amount n PAYE settlement agreement and ncome tax thereon 2.80 p.w. f earnng over 5,965 p.a. Collected through self-assessment Class 3 voluntary p.w. Class 4 self employed 9% on profts over 8,060 to 43,000* and a further 2% on profts above 43,000* Employment allowance - Elgble busnesses and chartes can clam a reducton of up to 3,000** of ther employer contrbutons NIC ncentve - From 6 Aprl 2015 Class 1 secondary NIC wll not be due from employers wth employees under the age of 25 who earn up to 827*** per week * ** *** Up from 42,385 n 2015/16 Up from 2,000 n 2015/16 Up from 815 n 2015/16 15

17 Changes from Aprl Prvate clent, property and employment Personal allowance ncreases to 11,500 Basc rate band ncreases to 33,500 Introducton of a 100,000 IHT famly home allowance, ncreasng to 175,000 by Aprl 2020 Resdental propertes held n non-uk companes owned by a non-uk domclary brought wthn the scope of UK IHT ISA (cash and shares) combned annual lmt ncreases to 20,000 Lfetme ISA ntroduced for adults under 40 to save for ther frst home or retrement. Annual savngs of up to 4,000 wll receve a 25% bonus from the government Two new 1,000 mcro-entrepreneurs allowances for property and tradng ncome Phasng n a restrcton of tax relef for mortgage nterest payments aganst rental profts to basc rate of tax (.e. 20%) Wthdrawal of non-uk domclary status for ndvduals resdent for 15 of the past 20 tax years for all tax purposes Corporate and busness Reducton n Corporaton Tax rate to 19% from 1 Aprl 2017, reducng further to 17% from 1 Aprl 2020 Qualfyng patent box tax rate reduces to 10% for accountng perods commencng on or after 1 Aprl 2017 Changes from Aprl Prvate clent, property and employment Penson lfetme allowance to ncrease from 1m n lne wth nflaton Class 2 NICs for self-employed abolshed (Class 4 NICS wll be reformed so self-employed contnue to buld enttlement to contrbutory benefts ncludng State Penson) Termnaton payments over 30,000 whch are subject to ncome tax wll also be subject to employer NICs Corporate and busness Busnesses keepng records dgtally may adopt Pay-As-You-Go tax payments CO 2 emssons threshold for 100% FYA on low emsson cars reduced to 50 g/km 16

18 CONTACT For more nformaton, please speak to your usual Blck Rothenberg contact or: Mark Abbs Partner - Expatrate Tax +44 (0) mark.abbs@blckrothenberg.com Gary Gardner Partner - Tax Dspute Resoluton +44 (0) gary.gardner@blckrothenberg.com Carolne Le Jeune Partner - Prvate Clent +44 (0) carolne.lejeune@blckrothenberg.com Geneveve Moore Partner - Corporate Tax +44 (0) geneveve.moore@blckrothenberg.com Frank Nash Partner - Property +44 (0) frank.nash@blckrothenberg.com Alan Pearce Partner - VAT +44 (0) alan.pearce@blckrothenberg.com Nlesh Shah Partner - Head of Tax +44 (0) nlesh.shah@blckrothenberg.com Nmesh Shah Partner - Prvate Clent +44 (0) nmesh.shah@blckrothenberg.com Paul Smth Partner - Corporate Tax +44 (0) paul.smth@blckrothenberg.com Susan Spash Partner - Prvate Clent +44 (0) susan.spash@blckrothenberg.com Ths TaxFax has been prepared for clents and contacts of Blck Rothenberg LLP. We take every care to ensure the nformaton gven s correct, but t should not be taken as suffcent for makng decsons. For specfc advce, please contact us. Blck Rothenberg LLP s authorsed and regulated by the FCA to carry on nvestment busness. TAXFAX LTD 16 MARCH 2016 SUBJECT TO CONFIRMATION BY THE FINANCE ACT 2016

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