There had been speculation that the introduction of the Annual Residential Property Tax, as well as extension of the capital gains charge, would be deferred. But not a bit of it. The new tax and the extended charge will come into force from 1st and 6th April respectively as originally planned.
Whilst confirmed today, details on the precise scope of reliefs for charities, diplomatic properties and certain publicly-owned properties remain unknown until publication of the Finance Bill.
It is a challenging timetable. Time is short to de-envelope existing structures prior to the changes taking effect. Also, professionals need to consider changes to reporting systems to ensure that clients comply or are clear as to their need to take responsibility for compliance going forwards.
There had also been speculation that SDLT reliefs should be backdated, so that the three taxes are fully aligned from the beginning. But this is not to be. SDLT reliefs from the 15% charge will not have effect until Royal Assent – so for example, developers and investors who qualify for exemption under the new tax and are excluded from the CGT extension may have to defer acquisitions to take advantage of the 7% SDLT rate. I struggle to think of a sensible explanation for this temporary misalignment.