Nothing very obvious grabs the rural headlines in today’s budget other than the extension of CGT rollover relief to the new Basic Farm Payments. This measure is backdated to 20 December 2013, the date the new payment entitlements were introduced.
The single most significant measure for most rural businesses will be the increase and extension of the Annual Investment Allowance. Currently £250,000 a year this was due to revert to its former rate of £25,000 after December. In a very welcome extension it is to be increased to £500,000 almost immediately (from April), and to be extended to 31 December 2015. Complications which arise from straddling account year ends aside, this is most welcome for any farmer with serious investment plans in the next year or two. The government reckons this will ‘cost’ £85 million in 2014-15 rising to £1,270 million in 2016/17. However there will be a benefit to government from 2017-18 of £445 million over two years as annual writing down allowances are proportionately reduced.
The property world will also be interested in the extension of the special taxes which now apply to dwellings owned by ‘non-natural persons’ – generally meaning valuable London property held by companies, latterly to avoid SDLT on sales and transfers. The threshold for 15% SDLT is reduced to £500,000 from £2 million immediately – although there are savings for those unfortunates who have exchanged contracts but not yet completed. The threshold for ‘ATED’ – Annual Tax on Enveloped Dwellings – will also start to fall from 2015, to £1 million in the first year incurring an annual ATED charge of £7,000 and the following year to £500,000, leading to an annual ATED charge of £3,500.
Environmentalists will want to study the changes to the Carbon Price Floor. The Carbon Price Support rate has been reduced to £18/tonne through to 2020. It had been planned to raise it to £30 per tonne in 2009 prices by then. However the EU Energy Trading Scheme has not worked well, and continuation at the current floor rate was seen as a threat to the competitiveness of the electricity generating industry. This should take some pressure off electricity bills in the next few years (although marginally so in most cases).
Other more detailed points which may be relevant in the rural economy and to property include: Continue reading “Budget 2014: Rural points”