Spring Budget 2017—Real Estate Taxes

This analysis is part of the Lexis®PSL Tax team’s summary of the Spring Budget 2017.  Some of the links require a LexisPSL subscription. If you are not a subscriber, you can take a free trial here.

Offshore property developers

At Budget 2016 the government announced rules to tax profits from trading in and developing UK land (see Practice Note: Profits from trading in and developing UK land (transactions in UK land)). Legislation will be included in FB 2017 to amend the commencement provisions for these rules so that all profits recognised in the accounts of developers on or after 8 March 2017 will be taxed, regardless of the date of the sale contract. Previously profits arising from contracts entered into before 5 July 2016 were excluded from the rules.

See: Spring Budget 2017 (para 3.21), OOTLAR (para 1.15), and TIIN, draft clause and explanatory notes.

SDLT—deferring acceleration of receipts

The government has announced that it will delay the reduction in the SDLT filing and payment window (from 30 to 14 days) until after April 2018. The government consulted on changes to the filing and payment process in 2016 and the changes were expected to be introduced in FB 2017.

See: Spring Budget 2017 (para 3.20) and OOTLAR (para 2.31).

Business rates

The government will provide £435m of support for businesses facing significant increases in business rates following the revaluation that takes effect from April 2017. Three measures were announced:

• a £1,000 business rate discount for public houses with a rateable value of up to £100,000
• a cap on the increase in business rates for small businesses losing small business rate relief, and
• a £300m discretionary relief fund to allow local authorities to provide support to individual cases in their local area

The government will also consult before the next revaluation in 2022 on its preferred approach for modernising the business rate system.

See: Spring Budget 2017 (paras 3.15–3.19).

Measures pre-announced

• Trading and property income allowances: as announced at Budget 2016, FB 2017 will include two new income tax allowances of £1,000 each for property and trading income for individuals. The draft legislation will be amended to prevent the allowances from applying to income of a participator in a close company or to any income of a partner from a partnership. See: OOTLAR (para 1.3).

Further reading

Further analysis on this Spring Budget:

• KEY ANNOUNCEMENTS AND BACKGROUND
• BUSINESS AND ENTERPRISE
• FINANCE
• EMPLOYMENT TAXES
• TAX ADMINISTRATION AND AVOIDANCE
• INDIRECT TAXES
• INCOME TAX AND NICs
• ENERGY AND ENVIRONMENT

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