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The capital allowances annual investment allowance (AIA) will be £200,000 from 1 January 2016.  The limit is expected to remain at this level and is much higher than the £25,000 limit previously expected, although not as generous as the £500,000 limit applying up to 31 December 2015.

Future restrictions to tax relief on interest in residential rental businesses

As announced in the December 2014 Autumn Statement, legislation will provide new rules about adding property to trusts on the same day, to target Inheritance Tax avoidance through the use of multiple trusts (based on the principles established in the Rysaffe case and commonly known as pilot trusts), which could mean that each pilot trust had its own nil rate band without reference to the other trusts.

With politicians now firmly in the run up to the May 2015 election, George Osborne’s last Autumn Statement before that election had a welcome surprise for home owners, as well as further measures for savers.  However there were several more technical amendments which may also affect landowners.

In the Budget 2012 the Chancellor announced measures that the Government believed would ‘simplify the Inheritance Tax regime for relevant property trusts and reduce compliance costs for trustees and practitioners’.
Where a property has been an owner’s only or main residence throughout the whole period of ownership, private residence relief will be available on the capital gain arising on sale.  However, where a property has not been occupied as the owner’s only or main residence throughout the period of ownership, private residence relief may only be available for a proportion of the gain.