More News for Business from the latest Budget Statement.
Corporation Tax (CT)
Future CT rates are set as follows:
Financial Year Commencing
CT Rate
1st April 2016
20%
1st April 2017
19%
1st April 2018
19%
1st April 2019
19%
1st April 2020
17%
*was to be 18% but a further reduction was announced in the Budget
Capital Gains Tax: changes to rules to extend availability of Entrepreneurs’ Relief on associated disposals
This measure will affect individuals who realise gains on a disposal of a private asset, which is used in a business carried on by their partnership or company, when they retire or reduce their participation in their business.
The measure allows Entrepreneurs’ Relief (ER) to be claimed on an ‘associated disposal’ of a privately-held asset when the accompanying disposal of business assets is to a family member. Relief can also be claimed in some cases where the disposal of business assets does not meet the present 5% minimum size condition.
The changes announced by this measure will be backdated to apply to associated disposals on or after 18th March 2015.
Capital Gains Tax: entrepreneurs’ relief: changes to the treatment of joint ventures and partnerships
This measure affects individuals and trustees who realise gains on shares in a company which invests in a joint venture company.
The measure changes the definitions of a ‘trading company’ and a ‘trading group’ which apply for entrepreneurs’ relief (ER) purposes. Where the new definitions apply, a fraction of the activities of a joint venture company will be treated as carried on by a company which holds shares in the joint venture company. Similarly, where the new definitions apply, trading activities of a company in its capacity as a partner in a firm will be taken into account in deciding whether the company is a trading company for entrepreneurs’ relief purposes.
The changes announced by this measure will be backdated to apply to disposals on or after 18th March 2015.
Capital Gains Tax: lifetime limit on Employee Shareholder Status exemption
This measure affects individuals who receive shares under an Employee Shareholder Agreement.
The measure places a lifetime limit of £100,000 on the Capital Gains Tax (CGT) exempt gains that a person can make on the disposal of shares acquired under Employee Shareholder Agreements entered into after 16th March 2016.
Abolition of class 2 NI
Class 2 National Insurance contributions (NICs) are to be abolished from April 2018, which will reduce the NICs paid by self-employed individuals by an average of £134 a year and will end an outdated and complex feature of the NICs system.
