Real Estate Briefing – Budget 2020

Key changes

Stamp Duty Land Tax: From April 2021, a new 2% surcharge will be introduced on non-UK residents acquiring property in England and Northern Ireland.

Structures and Building Allowances (SBAs): SBAs which are available for qualifying investments to construct new or renovate old non-residential structures and buildings will be increased from 2% a year to 3% a year. This change will take effect from 1 April 2020 for corporation tax and 6 April 2020 for income tax.

Capital allowances: Legislation will be introduced to ensure that 100% first year capital allowances can continue to be claimed on eligible expenditure in designated enterprise zones until at least 31 March 2021.

Corporation tax: The corporation tax rate will not be cut to 17% as planned but will remain at 19%.

Entrepreneurs’ relief: Contrary to most expectations this relief is not being scrapped and instead, the lifetime limit will be reduced from 11 March 2020 so that only qualifying capital gains of up to £1m (down from £10m) will qualify for the relief. There are special provisions for disposals entered into before 11 March 2020 that have not been completed.

Business rates relief: In response to COVID-19, the business rates retail discount will be increased. The government had already announced that it would, for one year from 1 April 2020 be increasing this relief from one third to 50% for properties in England with a rateable value below £51,000. The relief will now be increased to 100% for one year from 1 April 2020 and expanded to include hospitality and leisure businesses.

The business rates discount of £1,000 for pubs which the government had committed to introducing for pubs in England with a rateable value below £100,000, will be increased to £5,000 for one year from 1 April 2020 to support pubs in response to COVID-19.

The government will be launching a fundamental review of business rates to report in the autumn.