Ed Gooderham and Nick Park look at two key issues raised by the Autumn Statement in answer to the South Wales Argus‘ Big Question this week (see below for their answer in full):
“The Autumn Statement has raised, in particular, two key issues.
The good news is that there are changes to Stamp Duty Land Tax (SDLT). Under the old rules (the slab system), house buyers paid tax at a single rate on the entire property price. The new rules mean that house buyers will only pay the relevant rate of tax on the part of the property price that falls within each tax band. As with the old system, there will be no stamp duty on properties under £125,000. However, at the £250,000 threshold, the duty only increases to 2% and there are increases to 5% and 10% for properties up to £925,000 and £1.5m respectively. These changes will greatly reduce the burden of stamp duty on those looking to get a foot on the housing ladder.
The bad news relates to businesses changing from sole traders or partnerships to limited companies. Based on the information that we have seen so far, it will no longer be possible to claim Entrepreneurs’ Relief on the sale of goodwill to a related company. Similarly, it will no longer be possible to claim Corporation Tax Relief on goodwill purchased from a related party. These changes are effective immediately, but do not affect purchased goodwill from unrelated parties.”
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.