Clifford Chance

Budget 2012

22 March 2012

The UK Budget delivered today focussed on headline tax rates.  The corporation tax rate will be reduced from 26% to 24% in April 2012 and the 50% income tax rate will be reduced to 45% with effect from 6 April 2013.  The majority of income tax payers will benefit from an increase in the personal allowance of over £1,000 to £9,205 from April 2013.  These measures are to be paid for in part by a clampdown on tax avoidance with the Government announcing that it will introduce a general anti-abuse rule ("GAAR"), and also by an increase in the bank levy rates.  Purchasers of expensive residential property were the big losers as the rate of stamp duty land tax has been increased to 7% on such purchases.  The penal rate of 15% where such a property is sold into a corporate envelope combined with the threat of an annual charge and possible retrospective legislation is likely to make SDLT mitigation for such properties far more challenging in the future.

 

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