Duties
New rate of stamp duty land tax (SDLT)
A higher SDLT rate of 5% will be introduced for purchases of residential property where the consideration exceeds £1 million.
The new higher rate will apply to residential purchases where the effective date (normally the date of completion) is on or after 6 April 2011.
SDLT for first time buyers
Relief will be available from SDLT for purchases of residential property at up to £250,000 where the purchaser or all the purchasers are first time buyers and intend to occupy the property as their only or main home.
The new relief will be available for residential purchases where the effective date (normally the date of completion) is on or after 25 March 2010 and before 25 March 2012.
Partnerships
Legislation is being introduced to ensure that existing anti-avoidance rules will apply to prevent companies and individuals from exploiting the SDLT partnership rules to artificially reduce the SDLT payable on certain land transactions. Transactions which fall within the anti-avoidance rules will no longer benefit from the special partnership rules for calculating chargeable consideration.
Measures relating to landfill
The current standard rate for landfill tax is £40 per tonne and this is already due to increase to £48 per tonne as from 1 April 2010. The Chancellor announces a further increase to £56 per tonne as from 1 April 2011. The standard rate applies to waste materials that are not inert or inactive. The rate for inert or inactive material remains at £2.50 per tonne.
Inert and inactive materials are specified by Treasury Order which lists the materials that qualify for the lower rate of £2.50 per tonne. New legislation coming into force on 1 October 2010 will provide for publication and review of criteria for determining what material is lower rated and require HM Treasury to have regard to these criteria when listing materials in the Order. This will apply to disposals of material made on or after 1 October 2010.
The Landfill Communities Fund scheme encourages landfill site operators to fund local community environmental projects. Under the scheme, operators can claim a tax credit for contributions made to approved environmental bodies (EBs). The tax credit is worth 90% of any qualifying contribution made to an enrolled EB for spending on an approved project, subject to a maximum percentage of the operator's landfill tax liability during the contribution year. The maximum credit claimable will be reduced from 6% to 5.5% with effect from 1 April 2010.
Alcohol and tobacco products duty
The duty rates for tobacco products are increased by 1%.
The impact of the changes on retail prices on and after 29 March 2010 for typical alcoholic drinks is equivalent to:
- 36p on a 70cl bottle of spirits @ 37.5% abv
- 2p on a pint of beer
- 5p on a litre of still cider
- 9p on a 75cl bottle of sparkling cider
- 10p on a 75cl bottle of wine or made-wine
- 12p on a 75cl bottle of sparkling wine.
