In light of the upcoming General Election (on 12 December 2019), below are some of the tax policies the Labour Party may reportedly seek to implement if elected. As yet, there are no manifestos, so this is based only on reported statements to date:
- Income Tax: Increasing the rates to 45% above £80,000 and 50% above £123,000 and removing mortgage interest tax relief for landlords who charge "excessive rents".
- SDLT: Abolishing SDLT for those buying homes to live in.
- ATED: Increasing ATED charges and extending the regime to properties valued at under £500,000.
- Capital Gains Tax: Abolishing principal private residence relief and charging CGT on the disposal of second homes/investment properties at income tax rates.
- Inheritance Tax: Abolishing inheritance tax and replacing it with a lifetime gifts tax levied on the recipient (above a lifetime allowance of £125,000) at income tax rates.
- Non-Doms: Potentially abolishing resident non UK-domiciled status.
- General Anti-Abuse Rule: Extending the rules to cover “avoidance” rather than just “abuse”.
- General: Creating a public register of all trusts, ensuring that Crown Dependencies and Overseas Territories introduce publicly available registers of beneficial owners, and providing more resources in relation to Unexplained Wealth Orders.
Separately, in preparation for the start of 2020, there are also several administrative and practical matters to keep in mind, including the following:
- By 10 January 2020, more trusts are expected to be required to register with HMRC's trust registration service, in line with the Fifth Anti-Money Laundering Directive.
- By 31 January 2020, trustees of registered trusts must update the HMRC's trust register with any developments, and taxpayers filing online must submit their self-assessment tax return for the 2018/19 tax year.
- By 5 April 2020, those becoming UK tax resident and/or deemed domiciled from 6 April 2020 may wish to review their affairs for tax efficiency.
- From 6 April 2020, companies holding UK rental properties will become subject to UK corporation tax (rather than income tax) on rental profits. Other significant changes to the UK property tax regime were discussed in the last edition of Tax Aware.
Please contact us to discuss options and/or obligations.