The stamp duty land tax zero rate threshold for all residential
home buyers, has been doubled from £60,000 to £120,000.
This will affect all residential property transactions
from the 17 March 2005. The measure will exempt an extra
300,000 home buyers from stamp duty land tax each year.
To maintain interest in home ownership in the 2000 Enterprise
areas the stamp duty land tax zero rate threshold will
remain at the higher level of £150,000.
Commercial transactions - only in disadvantaged
areas.
Buyers entering into a commercial land transaction in
an enterprise area from the 17th of March 2005 will no
longer be able to claim the disadvantaged areas relief.
The relief will be preserved for the completion or substantial
performance of most contracts entered into on or before
the 16th of March 2005.
ISA's - Retention of present limits for 5 years
The present ISA limits will continue to 5 April 2010. They
are:
£7,000 maximum investment, £3,000 of which can be in cash.
This is a change to the existing regulations which were
due to increase the ISA limits from 6 April 2006. This change
will now be delayed or reconsidered after 5 April 2010.
Trusts - simplified rules
Trusts with vulnerable beneficiaries.
Backdated to 6 April 2004 the Revenue is to introduce
new rules so that a trust will pay tax as if the vulnerable
person were receiving the income or gains directly. In
most cases this should result in a reduction in tax and
an increase in the funds available for distribution to
the beneficiaries.
Low income trusts
Introduction of a standard
rate band of £500 which will ensure that 25,000 trustees
that receive income under this amount will no longer have
to submit a self-assessment tax return. This will
apply from 6 April 2005.
Extension of Low Budget Film Tax Relief
The present relief will
be extended to 31 March 2006.
The Revenue is also introducing
measures to counter various tax avoidance schemes in respect
of Film Tax Relief.
Landlord Energy
Saving Allowance
This allowance will be
extended from the 7 April 2005 to include expenditure on
solid wall insulation.
The allowance is presently
available to landlords who pay income tax and incur expenditure
installing loft insulation or cavity wall insulation in
dwelling houses which they let. The maximum claim per building
is £1500.
Renovation Of
Business Premises In Disadvantaged Areas
Revenue are proposing
a new Business Premises Renovation Allowance (BPRA) which
will provide a 100% first-year allowance.
The allowance will be
available to any individual or company who incurs expenditure
in bringing qualifying business premises back into business
use. The allowance will only be available for property
that has been vacant for a year or more and in one of the
designated disadvantaged areas of the UK.
The commencement date
of the scheme will apply once state aid approval has been
granted.
Payments to employees
in full-time attendance at universities and technical colleges.
There are two main changes:
-
Payments of up to £15,000 (previously £7,000) for an
academic year can be made tax free.
-
New regulations are being introduced so that these
payments can also be made free of class 1 national insurance.
The new tax and national insurance treatment will start
for payments made for the 2005-06 academic year, commencing
the first of September 2005.
Increased benefits for pensioners
-
Winter fuel allowance 2005 £200, for over 80s, £300.
-
Council tax refund £200.
-
Free local bus travel in all areas.
Tax rates and allowances 2005-06
Income Tax - No change in rates of tax.
Tax bands increased in line with inflation.
Income Tax Allowances - personal allowances
Single persons:
Under 65 - £4,895 (2004-05 £4,745)
Age 65 to 74 - £7,090 (2004-05 £6.830)
Age 75 and over - £7,220 (2004-05 £6,950)
Married Persons:
Aged less than 75 (born before 6 April 1935) £5,905 (£5,725
2004-05)
Aged 75 and over £5,975 (£5,795 2004-05)
(Subject to restriction for earnings in excess of £19,500
(£18,900 2004-05)
Blind Person's Allowance £1,610 (2004-05
£1,560)
Capital Gains Tax - Annual tax exempt amount.
Individuals £8,500 (£8,200 2004-05)
Most Trusts £4,250 (£4,100 2004-05)
Gains on sale of principal private residence will continue
to be exempt from capital gains tax.
Corporation Tax - no changes to rates.
Inheritance Tax
The government is to increase the value of exempt estates
to £300,000 over the next three years. The relevant
changes are:
From 6 April 2005 the limit is increased to £275,000.
From 6 April 2006 the limit is increased to £285,000, and
From 6 April 2007 the limit is increased to £300,000.
The present limit for 2004-05 is £263,000.
Company car fuel benefit charge - will
be frozen at £14,400.
Company Car Tax - minimum charge will
be applied on vehicle emissions equivalent to 140 grams
per kilometre of CO2.
Increases in "Sin Taxes"
From 6pm 16 March 2005:
-
Cigarettes - 7p on packet of 20
-
Cigars - 3p per packet of 5
-
Hand Rolling Tobacco - 8p per 25g.
From midnight on 20 March 2005:
-
Beer - 1p per pint
-
Wine - 4p per 75cl bottle
-
Spirits, sparkling wine, cider - no change
Child and Working Tax Credits
Child element of CTC will increase by £65pa to £1,690pa.
Other elements of the tax credits will rise in line with
inflation.
VAT Changes from 1 April 2005
Increased turnover limits for registration and deregistration:
-
Registration - turnover threshold increased to £60,000.
(£58,000 2004-05)
-
Deregistration - turnover limit increased to £58,000.
(£56,000 2004-05)
No change in 17.5% standard rate of VAT.
Tax Diary March/July 2005
31 March 2005 - Deadline for small companies
to incur expenditure that will qualify for 50 per cent capital
allowances
5 April 2005 - Deadline for unincorporated
businesses to incur expenditure that will qualify for 50
per cent capital allowances
(After these dates the first year capital allowance reduces
to 40%)
1 April 2005 - Due date for corporation
tax due for the year ending 30 June 2004.
5 April 2005 - Last day for organising
your capital gains tax disposals to ensure you take advantage
of your £8,200 exempt annual allowance.
5 April 2005 - Last day for making any
exempt annual gifts for inheritance tax purposes. (Up to
£3,000 per year, £6,000 if you have not used the previous
tax years annual allowance.).
19 April 2005 - Last date to pay any outstanding
PAYE and Class 1 NICs for 2004/05 to the Revenue. (If you
pay your tax electronically the due date is 22 April 2005).
19 May 2005 - Last date to submit P14
and P35 end of year forms to the Revenue.
31 May 2005 - Ensure all employees have
been given their P60s.
6 July 2005 - Ensure forms P11D(b), P9D
and P11D are submitted to the Revenue.
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Summing Up - PLEASE NOTE: The ideas shared with you in
this email are intended to inform rather than advise. Taxpayers
circumstances do vary and if you feel that tax strategies
we have outlined may be beneficial it is important that
you contact us before implementation. If you do or do not
take action as a result of reading this newsletter, before
receiving our written endorsement, we will accept no responsibility
for any financial loss incurred.
