DunnCox wants to ensure that our clients understand the possible economic opportunities that may be available arising from the 2019/20 budget announcement. Here are some ways these changes can be beneficial to you:
1. NO MORE MINIMUM BUSINESS TAX
- Minimum business tax is currently $60,000.00 per year payable by in two installments of $30,000.00 each in June and September;
- Currently all companies are liable to pay this tax;
- Minister announced that effective April 1, 2019 Minimum Business Tax will be abolished!
2. INCREASE GCT THRESHOLD
- The GCT threshold has been increased from $3 Million Dollars to $10 Million Dollars.
- This increase will result in many businesses falling below the $10 Million Dollar threshold not having to be “registered taxpayers” for the purposes of GCT.
3. STAMP DUTY AT A FLAT RATE
- Currently some transactions require documents to be stamped by the Stamp Commissioner before they are able to be relied on during court proceedings. The fees for the stamping of these documents (stamp duty) is payable by either a flat fee or ad valorem (a percentage of the value of the transaction).
- Ad valorem stamp duty is to be replaced with a flat fee of $5,000.00
- Transactions such as refinancing mortgages, leasing property, transfers of land may benefit from this flat rate as the stamp duty payable will no longer be tied to the value of the transaction.
4. REDUCED TRANSFER TAX
- Transfer tax will be reduced from 5% to 2% effective April 1, 2019;
- This means reduced transaction costs for transferring land and shares;
- Now is a great time for estate planning! Including an additional name on a property title, which allows for easier transfer after death, is now more affordable than before.
- Companies wishing to acquire shares or transfer shares between shareholders, these transactions will now attract less transfer tax!
6. INCREASE TAX EXEMPT THRESHOLD FOR ESTATES
- Currently estates valued at $100,000.00 or less have been exempt from the payment of transfer tax.
- This tax exempt threshold has been increased to $10,000,000.00.
- Many families have avoided administering their deceased relative’s estate due to the large amount of transfer tax that would be payable. These estates can now be assessed and wrapped up with many properties “tied up in an estate” to be transferred into the names of beneficiaries.
- This enables beneficiaries to deal with the property in any way they want, such as using it to secure a loan or sell the property.
The 2019/20 budget announcement is filled with potential opportunities for our clients across various sectors.