Budget 2018 – Other matters

Inheritance tax (IHT)

There were no changes to inheritance tax rates.

As previously announced, the residence nil rate band increased from £100,000 to £125,000 for 2018-9 and will increase to £150,000 in 2019-20 and £175,000 for 2020-21.  There is a tapered withdrawal of the additional nil-rate band for estates with a net value of more than £2m. This is at a withdrawal rate of £1 for every £2 over this threshold. Any unused RNRB can be transferred to a surviving spouse or civil partner. It is also available when a person downsizes or ceases to own a home on or after 8 July 2015 and assets of an equivalent value, up to the value of the additional nil-rate band, are passed on death to direct descendants.

There were some technical amendments in the Budget to ensure that some of the rule re downsizing were working as intended.

Stamp Duty Land Tax (SDLT)

The relief for first time buyers will be extended to purchasers of qualifying shared ownership properties who do not elect to pay SDLT on the market value of the whole property when they purchase their first share.

The relief will apply retrospectively from 22 November 2017, meaning that a refund of tax will be payable for those who have paid SDLT after the 22 November 2017 in circumstances which now qualify for first time buyers relief.
Relief will be applied to the first share purchased, where the market value of the shared ownership property is £500,000 or less.

Single-use plastics waste

The government will introduce a tax on the production and import of plastic packaging from April 2022.  Subject to consultation, this tax will apply to plastic packaging which does not contain at least 30% recycled plastic.

Charities

The Chancellor announced an increase in the small trading tax exemption limits for charities that apply to trading that does not relate to a charity’s primary purpose.

The current limits are:

Annual charity income       Maximum non-primary purpose trading
Under £20,000                   £5,000
£20,001 to £200,000          25% of the charity’s total annual turnover
Over £200,000                   £50,000

The limits will increase to:
Annual charity income       Maximum non-primary purpose trading
Under £32,000                   £8,000
£32,000-£320,000              25% of income
Over £320,000                   £80,000

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