The majority of the statement set out spending plans for the next 4 years.
The following key announcements were made affecting taxation —
Corporation Tax and Income Tax
Tax planning around the intangible fixed assets regime used to obtain more generous corporation tax relief than that intended by the legislation will be targeted by amendments to the regime to stop the use of partnerships to obtain relief that was not intended.
The government will also amend legislation to counter two types of avoidance involving capital allowances and leasing, which involve businesses artificially increasing the value of their capital allowances or lowering the amount of tax that they pay.
Legislation will be introduced to allow the ISA savings of a deceased person to continue to benefit from tax advantages during the administration of their estate.
Capital Gains Tax
From April 2019 any CGT due on the disposal of a residential property will be required to be made by way of payment on account within 30 days of the disposal.
The government will amend the CGT computations required by non-residents on the disposal of UK residential property by removing with retrospective effect from 6 April 2015 a double charge that occurs in some circumstances and correcting an omission with effect from 25 November 2015. The government will also give HM Revenue and Customs powers to prescribe circumstances when a CGT return is not required by non-residents and will add CGT to the list of taxes that the government may collect on a provisional basis.
Inheritance tax
Legislation will be introduced to ensure that a charge to Inheritance Tax will not arise when a pension scheme member designates funds for drawdown but does not draw all of the funds before death. This will be backdated to apply to deaths on or after 6 April 2011.
Following the review announced at the Budget in March 2015, the government will not introduce new restrictions on how deeds of variation can be used for tax purposes but will continue to monitor their use.
Stamp Duty Land Tax
A new 3% surcharge on Stamp Duty Land Tax for buy-to-let properties and second homes on a purchase price of £40,000 or more will be introduced from April 2016.
The higher rates will not apply to corporates or funds making significant investments in residential property but the government will consult on the policy detail, including on whether an exemption for corporates or funds owning more than 15 residential properties is appropriate.
Legislation will be introduced requiring the reporting and payment of Stamp Duty Land Tax to be made within 14 days of a transaction instead of the current 30 days.
Tackling tax avoidance
£800 million will be allocated to HM Revenue and Customs to tackle tax evasion, aggressive tax planning and non-compliance.
The government will introduce a new penalty of 60% of the tax due to be charged in all cases successfully tackled by the General Anti-Abuse Rule (GAAR) and will make small changes to the GAAR’s procedure to improve its ability to tackle marketed avoidance schemes.
Announcements were made targeting ‘deep in the money’ Stamp Duty options and confirming that opportunities for income to be converted to capital to gain a tax advantage would be reduced by the introduction of a targeted anti-avoidance rule.
New criminal offences will be introduced for tax evasion (removing the need to prove intent for the most serious case of failing to declare offshore income) and for corporates failing to prevent tax evasion (for corporates which fail to prevent their agents from criminally facilitating tax evasion by an individual or entity).
New civil penalties will also be introduced for offshore tax evaders and those who enable offshore tax evasion.
Other key policy announcements were made —
Tax Credits
The planned £4.4bn cut in tax credits will be abandoned.
Pensions, Savings and Personal Taxation
The basic State pension is to rise by £3.35 a week to £119.30 next year
From April 2016 those reaching pensionable age will receive a new single-tier pension with a starting rate of £155.65.
Every individual and small business is to have their own digital tax account by the end of the decade. Most businesses, self-employed people and landlords will be required to keep track of their tax affairs digitally and update HM Revenue and Customs at least quarterly via their account.
Police, Security and Justice
Police budgets in England will not be cut in real terms.
Underused courts are to be sold and the £700m raised is to be spent on new technology.
Increased spending on the military, intelligence agencies, cyber security and counter-terrorism activity was announced.
Health
The NHS budget is set to rise from the current £101bn to £120bn by 2020-21. In return, the NHS in England is expected to make £22bn in efficiency savings.
Education and Childcare
The schools budget in England has been protected in real terms.
The new 30-hour free childcare subsidy for parents of three- and four-year-olds is to be limited to those working more than 16 hours a week and earning less (per parent) than £100,000 per annum.
Housing and Local Government
A new London Help to Buy scheme is being introduced to offer interest-free loans worth up to 40% of the value of a newly built home to those with a 5% deposit.
Business, Science and the Environment
Uniform business rates are to be abolished. Five city areas in the West Midlands and the North will be electing mayors who will have authority to impose rates for specific purposes and it is intended to extend this to other local authorities.
Written by: Jessica Greenhall and David Kingham
This announcement is for information purposes only and is not to be regarded as constituting legal or tax advice.