Autumn Budget 2021 - Boodle Hatfield

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13 Dec 2021

Autumn Budget 2021

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As always, there was much anticipation of what the Budget may hold, but once again, very few changes to personal and capital taxes materialised.

The main tax rates and allowances had already been set by the March Budget and the introduction of a social care levy and an increase in the dividend tax rate had been announced in September. As a re-cap, the highlights include:

  • Capital Gains Tax (CGT): From Budget day (27 October 2021) the deadline to report and pay CGT after selling UK residential property increased from 30 to 60 days after completion. When mixed-use property is disposed of by UK residents, the 60 day payment window will only apply to the residential element of the property gain.
  • Dividend rates will increase by 1.25% from 6 April 2022. It will mean that the dividend ordinary rate will be 8.75%, the upper rate 33.75% and the additional and dividend trust rate will be 39.35%.
  • A 1.25% Social Care Levy will be introduced from April 2022 initially as an increase to NICs and then taking the form of a stand-alone levy from April 2023.
  • Rates: The March Budget had confirmed that various bands will be frozen until April 2026. CGT, Income Tax and IHT rates otherwise remain the same, although the Chancellor has indicated he would like rates to fall if possible. ATED charges increase automatically each year in line with inflation, so they will rise by 3.1% from 1 April 2022.
  • Annual Investment Allowance: The temporary £1m level was extended to 31 March 2023.
  • Residential Property Developer Tax (RPDT): The new tax to be introduced from April 2022 will be charged at 4% on the profits that companies and corporate groups derive from UK residential property development exceeding an annual allowance of £25 million. Property investors including those in the build to rent sector will not be caught by the charging provisions which is a welcome boost to that area of the market companies to relocate to the
  • Corporate re-domiciliation: A fairly high level consultation has been published on the introduction of a regime that will make it possible for companies to relocate to the UK.