George Osborne delivered a typically buoyant speech which combined his much-anticipated Spending Review with the Autumn Statement.  He declared that the goal of the first spending review, delivered five years ago, was to "rescue" Britain from the grip of a financial meltdown. Having delivered this salvation to the nation the focus of the current spending review was on "rebuilding Britain" and it seems that now we (not Bob) are “the builders" across the country. The economic plan continues to be for the deficit to be eliminated and the UK to be running a surplus of over £10bn by 2019-20. The headline for the national newspapers will likely be the dramatic U-turn on the controversial proposals to cut tax credits which will not be implemented at all. In terms of issues of interest to those in the property world the more significant items, announced by our self-styled "guardian of economic security", are listed below:

Taxation of UK property owners

New SDLT rate on purchase of additional residential properties: Higher SDLT rates will be charged on purchases of additional residential properties, such as buy to let properties and second homes, with effect from 1 April 2016. The higher rates will be 3 percentage points above the current SDLT rates, meaning a top rate of 15% or possibly 18% if the uplift applies to the SDLT rate for non-relieved “enveloped property”.  The government will consult on the policy in detail. However they have indicated that an exemption for corporates or funds owning more than 15 residential properties may be introduced as part of the rules. What will be particularly important to watch as we get more detail on this is how it impacts large scale landowners who just happen to operate their property businesses as partnerships or trusts. These may not qualify as “funds” and on the face of it they would be caught by the increase. This could have a significant cost for those businesses.

New SDLT seeding relief: The government will introduce a seeding relief for Property Authorised Investment Funds (PAIFs) and Co-ownership Authorised Contractual Schemes (CoACSs) and make changes to the SDLT treatment of CoACSs investing in property so that SDLT does not arise on the transactions in units. The changes are to take effect from the date Finance Bill 2016 receives Royal Assent.

CGT deadline on disposal of residential property: The government will introduce with effect from April 2019 a requirement for the capital gains tax due in respect of a disposal of UK residential property to be paid within 30 days of completion (it is currently payable between 10 and 22 months after a disposal is made).  This new 30 day deadline is the same as that currently in force for the payment of  SDLT (which is also changing as discussed below). At present it is necessary to supply evidence of payment of SDLT for a transfer of land to be registered at the Land Registry.  One could imagine the government adopting some similar measure in respect of the CGT.

SDLT filing process: The government will consult in 2016 on changes to the SDLT filing and payment process, including a reduction in the filing and payment window from 30 days to 14 days. These changes will come into effect in 2017-18.

ATED and 15% SDLT rate reliefs: The government will extend the reliefs available from ATED and the 15% higher rate of SDLT to equity release schemes (home reversion plans), property development activities and properties occupied by employees from 1 April 2016.

Taxation of companies

Apprenticeship Levy: The apprenticeship levy on larger employers announced in the Summer Budget will be introduced in April 2017. It will be set at a rate of 0.5% of an employer’s paybill. Each employer will receive an allowance of £15,000 to offset against their levy payment. This means that the levy will only be paid on any paybill in excess of £3 million and that less than 2% of UK employers will pay it. The levy will be paid through Pay As You Earn.

Northern Ireland Corporation Tax: The government will support the devolution of corporation tax powers to Northern Ireland (subject to receiving evidence that its finances have been put on a sustainable footing).  The Northern Ireland Assembly has now indicated that it wishes to pursue the implementation of a new Northern Ireland rate of 12.5% in April 2018.  It will be interesting to see whether N Ireland is successful in attracting international businesses once the new rate is introduced.

Company distributions: The government will publish a consultation on the rules concerning company distributions later in the year.

Tackling tax avoidance

General Anti Abuse Rule (GAAR) tax penalty: The government will introduce a new penalty of 60% of the tax due to be charged in all cases successfully tackled by the GAAR. The risk of undertaking planning which could be caught by the GAAR thus increases further.

New tax avoidance offence: The government will introduce a new criminal offence that removes the need to prove intent for the most serious cases of failing to declare offshore income and gains.