The Autumn Budget contained a number of well trailed measures together with some surprises. These are the main developments we have highlighted in our Tax Blog with links to the individual blog posts. Words underlined are live links to blog posts or documents.

Capital gains tax for non-residents selling UK commercial property

The Government proposes to bring non-residents into charge to tax on gains from April 2019, not only on direct sales of UK commercial real estate but also on sale of holdings of 25% or more in "property rich companies" and other vehicles. This is likely to have a major impact on overseas investors in UK real estate. See Jacob Gilkes's blog post on this for further information. There will be a lot more to say about this during the consultation period.

Extension of corporation tax to non-UK resident companies

The Government has been consulting on whether to bring non-UK companies into charge to corporation tax on income, principally, it is thought, in order to ensure that the new interest restriction, hybrid mismatch and corporate losses rules will apply to them. It is not yet clear whether this will apply only to UK rental and trading income already charged to income tax or also to wider categories of income. We should know more when the responses to consultation are published next week.

SDLT exemption for "Generation Rent"

An exemption for first time buyers paying up to £300,000; for those paying up to £500,000, the first £300,000 of the price will be exempt from SDLT with 5% payable on the balance of the consideration. There will be no relief for properties bought for more than £500,000.

Changes to Entrepreneurs' Relief, Enterprise Investment Scheme and other venture capital reliefs in light of the Patient Capital Review

There were several measures to report on this including increase of the investment threshold for investment in knowledge-rich companies but restrictions on relief for lower risk investments, particularly those designed to provide capital protection. see Cliona Kirby's blog posts here and here for further details. The Government is also concerned that employee shareholders may be discouraged from seeking further equity finance because issue of further shares might dilute their individual holdings below the 5% threshold for entrepreneurs' relief (ER). It is consulting on ways to help preserve ER in these circumstances.

Measures to increase tax revenues from the digital economy

The protection of our tax base will have to be dealt with as part of an international response, including a recently-announced EU initiative. However the Government has published a positon paper giving its views on how to address this challenge. Measures include expanding the circumstances in which UK income tax can be charged on payments of royalties to non-UK residents and also making online market places liable for unpaid VAT liabilities of some online sellers. See Richard Taylor's blog post for further information.

Oil and Gas: transfer of tax history

New measures allowing the tax history of North Sea assets to be transferred from sellers to buyers, mitigating the effective cost of decommissioning for buyers of late-life assets. See the blog post by Philip Reid for details.

Consultation on extension to the private sector of the personal service company provisions affecting public sector clients

The Government says it will consult on this. See Nicholas Stretch's blog post for further details.

Changes to the tax treatment of partnerships

The Finance Bill will contain detailed legislation clarifying the tax treatment of partnerships, including provisions requiring allocations of profit in the same ratio as the commercial profits. See Graham Chase's blog post for more details.


The Chancellor has decided not to reduce the VAT registration threshold as it relieves the compliance burden on small businesses. Instead it will be frozen for two years. This is despite the fact that the UK has by far the highest VAT registration threshold in the EU and that it can cause distortion as businesses try to restrict their turnover to avoid the need to charge VAT. The Government will publish its response to the consultation on VAT grouping on 1st December.

Capital gains tax

Indexation relief for companies will be frozen at the amount fixed by the Retail Price Index for December 2017, so there will be no allowance for subsequent inflation on disposals on or after 1 January 2018.

The Chancellor has also announced the removal of the six year time limit within which companies must adjust for any depreciatory transactions when claiming a capital loss on disposal of shares in a group company.

On the positive side, new legislation will remove an anomaly which triggers a postponed tax charge when a new holding company is inserted above a non-UK company to which a UK company has transferred its trade and assets in exchange for shares.

Intangible fixed assets

Related party step-up schemes involving licences are counteracted with immediate effect. All licences for non-cash consideration will now be treated as taking place for market value rather than the licensor being able to recognise only net book value while the licensee recognises a higher market value. This extends to licences the 2015 provisions that countered step-up scheme avoidance involving transfers.

Double Taxation Relief

There will be a restriction on the double tax relief available to a UK company for foreign tax paid by its foreign branch or other permanent establishment (PE) where the company has received relief for losses against non-PE profits in the foreign jurisdiction.

A summary of tax measures contained in the Budget can be found here and full documentation via the following web page here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.