Budget 2021 - New CT measures highlight the need for careful planning on capital investment and loss utilisation
Whilst there were no increases in income tax or capital gains tax rates in Wednesdays’ Budget the exempt amounts and the income tax rate bands will be frozen from 6 April 2021 until the 2025-26 tax year. The Budget notes state that ‘this policy takes steps to ensure the sustainability of the public finances and funds our vital public services in a fair and sustainable way’.
On 8 July 2020, the Chancellor announced an immediate Stamp Duty Land Tax (SDLT) holiday until April 2021 on the first £500,000 paid for a main home in England or Northern Ireland. This has resulted in SDLT savings of £15,000 on homes costing £500,000 or more. The Government had originally stated that this holiday would not be extended. However, following lobbying by stakeholders, the Government has agreed to extend the £500k holiday until 30 June 2021.
In addition, it was announced in the Budget that the nil rate band will not immediately revert to the previous level of £125k from 1 July 2021; instead the nil rate band will be maintained at £250k until 30 September 2021, after which it will revert to £125k.