Reaction to Spending Review & Autumn Statement 2015 – Real Estate Tax Update

Chancellor George Osborne delivered his Spending Review and Autumn Statement Today on Wednesday 25th November 2015.

E³ Consulting highlights the initial key Property & Construction aspects – as referenced from the HM Treasury’s Spending Review and Autumn Statement 2015.

1.154 Tackling tax avoidance - The government is aware of tax planning around the intangible fixed assets regime used to obtain more generous corporation tax relief than is intended by the legislation. It will therefore amend the regime to stop arrangements that use partnerships to obtain relief that was not intended. The government will also amend legislation to counter two types of avoidance involving capital allowances and leasing, which involve businesses artificially increasing the value of their capital allowances or lowering the amount of tax which they pay

 1.251 The government is creating 26 new Enterprise Zones, including expanding 8 Zones on the current programme. These include 15 Zones in smaller towns and rural areas, spreading Enterprise Zone benefits to 108 sites across the country. This is in addition to the two announced earlier this year. The government will provide feedback to Local Enterprise Partnerships on unsuccessful applications and, where possible, the government will work with them to consider how the proposals could be improved. Since their start in April 2012, Enterprise Zones have laid down the foundations for success for 540 businesses, attracting over £2.2 billion pounds of private sector investment, building world class business facilities and transport links and attracting 19,000 jobs.

 3.64 VAT reduced rate for energy saving materials – The government will consult on legislation for Finance Bill 2016 to ensure the reduced rate of VAT on energy saving materials is maintained in line with EU law. (Finance Bill 2016)

There are many different aspects of these Government announcements. Most will be covered by the draft legislation to be published in the next few days and weeks, but some are longer term or simply promises to consult on certain aspects. As more detail becomes available we shall comment further on those matters that are most pertinent to our clients – operating across the property and construction sectors, as well as owners and occupiers from wider industry.

E3 Consulting provides specialist property tax advice to owners, investors and occupiers of UK real estate from offices in Southampton and London advising on Capital Allowances, Land Remediation Relief, VAT, Repairs and Maintenance and CIL. Please see our website or twitter to keep up to date with views and technical updates on property tax matters.