Budget 2021 – Other matters

Inheritance tax (IHT)

There were no changes to inheritance tax rates.

The standard nil rate band remains at £325,000 and the he residence nil rate band at £175,000.  These bands will be frozen up until 5 April 2026.

There is a tapered withdrawal (at a rate of rate of £1 for every £2) of the additional nil-rate band for estates with a net value of more than £2m.  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.

Any unused nil rate bands can be transferred to a surviving spouse or civil partner

Stamp Duty Land Tax (SDLT)

As announced in Budget 2020,  2% surcharge will be applied for all non-UK residents buying residential property in England and Northern Ireland from 1 April 2021.

The stamp duty holiday was extended, as widely expected.  The £500,000 nil rate band will remain until 30 June 2021.  There will then be a £250,000 nil rate band until 30 September 2021, at which the nil rate band will return to the usual £125,000.

Help to Grow Schemes

The Chancellor announced two Help to Grow schemes: Management and Digital.  The schemes will commence in the Autumn, but businesses can register interest now.

The Management scheme will will offer a new executive development programme with mentoring and peer learning, and government will contribute 90% of the cost.

The Digital scheme will help small businesses develop digital skills by giving them free expert training and a 50% discount on new productivity-enhancing software, worth up to £5,000 each.

The schemes are only available to businesses employing between 5 and 249 employees that have been trading for more than 12 months.

Further details can be found here.

Freeports

The Chancellor announced the creation of 8 Freeports in England.

Freeports are special economic zones with different rules to make it easier and cheaper to do business. They’re well-established internationally, but we’re taking a unique approach.

Freeports will have:

  • Simpler planning;
  • Infrastructure funding;
  • Cheaper customs – with favourable tariffs, VAT or duties;
  • Lower taxes – with tax breaks to encourage construction, private investment and job creation.

The English Freeports will be at:

  • East Midlands Airport.
  • Felixstowe and Harwich.
  • Humber.
  • Liverpool City Region.
  • Plymouth.
  • Solent.
  • Thames.
  • Teesside

The government will work with the Scottish, Welsh and Northern Irish administrations with regard to Freeports throughout the rest of the UK.

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