Budget 2010: Property

Commenting on the implications of today’s Budget for property business, Seb Tubb tax partner at international accountancy firm Mazars said:


“Residential and commercial property investors will be particularly relieved that the rate of capital gains tax remains at 18%. But, as was confirmed today, from next month, individuals engaging in property development and trading will be facing the 50% top income tax rate on profits when annual income is over £150k. We expect the potential to collect additional tax will encourage HMRC to look closely at active investors and question whether the profits are trading.

“For corporates, tax rates remain at 28% and 21% on all profits.

“The increase in the annual investment allowance, which gives immediate tax deduction for capital expenditure, from £50,000 to £100,000 is welcome and should encourage investment in plant and machinery.

“For residential investors however, the proposal that from April next year there will be a higher 5% Stamp Duty Land Tax rate for properties above £1 million increasing transaction costs for these properties.

“The well publicised increase in the nil rate threshold for Stamp Duty Land Tax from £125,000 to £250,000 is not as generous as it might seem. Only first time buyers can claim this relief from the 1% SDLT charge, and it only applies to transactions completed before 25 March 2012.”

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