Budget 2016 Overview by Condies
Condies Chartered Accountants has summarized the budget promised to be the “Budget that puts the next generation first.”
As we’ve come to expect from such occasions, there were a few surprises for businesses too:
- Relaxation of the qualifying criteria for the 10% Entrepreneur’s Rate of capital gains tax in relation to certain “associated disposals” and joint venture investments;
- A reduction in the basic rate and upper rate of capital gains tax from 6th April 2016 to 10% and 20% from 18% and 28% respectively;
- the 10% capital gains tax rate will be extended by an ‘investors’ relief’ on gains accruing on the disposal of particular qualifying shares by individuals;
- Income of less than £1,000 arising from trading or rental income sources will be ignored from April 2017;
- The corporation tax rate for companies will be reduced to 17% by April 2020.
- In order to keep the tax rate in line with the higher rate of tax on dividend income, the loans to participators tax rate payable will increase from 25% to 32.5% on or after 6 April 2016;
- The Class 2 national insurance contributions for the self-employed will be abolished from April 2018;
- The higher-rate income tax threshold will increase to £45,000 by 6th April 2018 for the rest of the UK. The Scottish threshold and rate will probably be set by the Scottish Government for 2017/18 onwards under the Scotland Act changes, however.
Scott Hallesy , Tax Strategist at Condies said, “a reduction in the rate of corporation tax alongside the changes to the capital gains tax system will make a welcome difference to our clients. The minimal changes to the pension regime are similarly welcome as the revised Scotland Act is sure to give us all something to think about in the next few years”.
For press queries, please contact:
Catriona Love, Marketing at Condies
Tel: 01383 721421