George Osborne

How the Chancellor’s 2014 Autumn Statement affects YOU!

George Osborne, the Chancellor of the Exchequer, announced his Autumn Statement on Wednesday (3 Dec 2014) in what could be seen as a mini budget. Here we focus on the key announcements, concentrating on those relating purely to taxation, as it is those which affect you, our customers, most directly.

1). First some good news: The UK is seeing the fastest growth out of all the G7 countries, and the number of people employed is at its highest point ever. This is good for all of us because it restores optimism in the UK economy, higher employment speaking for itself.

2). As we announced in a separate blog post, Stamp Duty (Land Tax) has been given a major shake-up and, for anyone buying a house for £935,000 or less, the amount of Stamp Duty which they’ll have to pay will be less, and sometimes very significant. See our separate blog post and infographic for more detail.

3). In the financial year 2015-16, the tax-free personal allowance (which is the amount you can earn before you start to pay any tax) will increase to 10,600 which is an increase of £600. So … more tax-free money in your pocket, which is good.

4). Economy flights will become cheaper for under 12s from 1 May 2015 and under 16s from 1 March 2016, because their tickets will become exempt from tax on those dates. So … a small concession, but another welcome one. Average 4-person families will save £26 for flights within Europe and £142 on flights to the U.S.

5). From 3 December 2014, spouses will be able to inherit their partner’s ISA benefits should their partner pass away. Currently this is not the case and the change will mean that, from 6 April 2015, the surviving spouse or civil partner will be able to Read more

Infographic: Stamp Duty Changes: Good News for Most!

In what, for most of us, is very welcome news, the Chancellor announced a significant tidy-up of Stamp Duty in his Autumn Statement yesterday. The changes will mean that 98% of those who pay Stamp Duty will save money — and potentially a significant amount. We believe that this is a fairer system, with the richest contributing the most and, in effect, counterbalancing the savings which will be made by those buying any property for less than £937,500.

So how will this affect you?

HM Treasury have released a rather useful infographic which, with the aid of examples, gives you a good idea of the savings you will make if the property you are buying costs less than £937,500 … or for richer people the extra you’ll pay if the property price is above that threshold.

Stamp Duty changes and their affects

So how does it work?

In the old Stamp Duty rules you had to pay a single Stamp Duty rate based on the entire value of the property being purchased. This meant sometimes hugely differing amounts of Stamp Duty being levied for sometimes similar property prices (depending on which side of the tax band threshold an individual house price fell). With the new tax bands, however, buyers will pay Stamp Duty at a rates applied to only the part of the property price falling within each tax band, rather like happens with income tax.

Here are the tax bands and the rates which apply:

Stamp Duty tax bands

You can also try the Read more

Introduction to Stamp Duty & Stamp Duty Land Tax

Stamp Duty is a type of tax you pay when you buy land or shares. You pay a Stamp Duty Land Tax when you buy property and Stamp Duty Reserve Tax when you buy shares.
You pay Stamp Duty Land Tax on such properties like houses, flats , other buildings and land. There is a threshold of 125,000 which is tax free. If the land or property is up to 250,000 than you pay a rate of 1% Stamp Duty Land Tax. From 250,001 to 500,000 there is a 2% tax rate and a rate of 4% for am amount exceeding 500,001.
If you want to buy a property which is designated by the government as a disadvantaged property than you do not have to pay any Duty Land Tax for an amount of 150,000 or less.
You pay Stamp Reserve tax when you buy shares. There is a tax rate of 0.5% of the value of the shares.
Stamp duty is payable when the shares are transferred to you using a stock transfer form and Stamp Duty Reserve Tax (SDRT) when the shares re transferred to you electronically,also known as paperless transactions, without using a stock transfer form.
When you buy shares from a stockbroker the transaction is usually completed electronically through the electronic settlement and registration system known as CREST. CREST automatically deducts the Stamp Duty Reserve Tax and sends it to the HMRC. If you do not pay for shares using CREST than you have to pay the stamp duty tax to Inland Revenue yourself.
You do not have to pay UK Duty Stamp or SDRT if you buy foreign shares. There will probably be foreign taxes involved that you need to carefully consider.
When buying either properties or shares, carefully tax planning must be considered. Taxfile’s tax accountants in South London always make sure you never pay more than your minimum tax liability.