• At-a-glance
• Administration Of Tax
• Personal Taxation
• Employment Taxation
• Business Tax
• Capital Allowances
• Corporation Tax
• Capital Gains Tax
• Inheritance
• Savings and Investments
  
• Pensions
  
• Charities
  
• Anti-Avoidance
  
• Stamp Taxes
• Value Added Tax
• Excise Duties
• Miscellaneous

PERSONAL TAX

Rates and Allowances for 2012/13

For 2012/13 the personal allowance for those under 65 will be increased to £8,105, and there will be a reduction in the basic rate limit to £34,370. All other income tax personal allowances and limits subject to indexation will be increased in line with the Retail Prices Index.

Furnished Holiday Lettings

Legislation will be introduced in Finance Act 2011 to amend the tax treatment of furnished holiday lettings (FHL) as follows. The changes have effect on and after 1 April 2011 for companies and on or after 6 April 2011 for individuals and partnerships, unless indicated otherwise:

• FHL in both the UK and the European Economic Area (EEA) will be eligible as qualifying FHL. This treatment is currently non-statutory;
  
• the minimum period over which a qualifying property must be available for letting to the public in the relevant period will be increased from 140 days to 210 days in a year with effect from April 2012;
  
• the minimum period over which a qualifying property is actually let to the public in the relevant period will be increased from 70 days to 105 days in a year with effect from April 2012;
  
• losses made in a qualifying UK or EEA FHL business may only be set against income from the same UK or EEA FHL business; and
  
• a ‘period of grace’ will be introduced to allow businesses that do not continue to meet the ‘actually let’ requirement for one or two years to elect to continue to qualify throughout that period.

Income Tax and National Insurance Contributions Reform

The Government is to consult on options to integrate the operation of income tax and National Insurance contributions (NICs). A consultation document is to be published later in 2011 setting out current differences and options to address them. The contributory principle of NICs is to be retained and NICs will not be extended to those over state pension age or to additional forms of income.

Non-domicile Taxation

Changes are to be introduced to the tax regime for non-UK domiciled individuals. The Government intends to implement the changes with effect from April 2012 following consultation on the detail. The changes will include removing the tax charge on remittances of income or capital gains to the UK for the purposes of commercial investment and introducing a higher £50,000 annual charge for individuals who have been UK resident for 12 years or more who claim the remittance basis.

Statutory Residence Test

The Government is to consult on the introduction of a new statutory definition of residence. A consultation document will be published in June 2011 with the intention of implementing the definition from April 2012.