2009 Budget: implications for property

Practical Law UK Legal Update 5-385-8360 (Approx. 18 pages)

2009 Budget: implications for property

by PLC Property

Introduction

Alistair Darling delivered the 2009 Budget following an acknowledgement that the economy is in its worst state for over sixty years.

As expected, the 2009 Budget did not contain any real surprises. The property industry will still be disappointed, however, that the Government did not take up some of the recommendations from the British Property Federation (BPF), that might have provided some real relief, particularly in relation to empty property rates relief, SDLT on bulk purchases of residential property and REITs.

This Legal update covers the main budget proposals affecting the property industry. For information on other aspects of the 2009 Budget, see:

PLC Tax, Legal update, 2009 Budget: summary of key tax announcements.
PLC Environment, Legal update, Budget 2009: environmental announcements.
PLC Private client, Legal update, Budget 2009, which covers the key announcements relevant for Private Client lawyers.

The 2009 Budget is a combination of measures to provide support where most needed against the adverse effects of the economic downturn, and measures to support recovery.

In terms of the property industry, the measures to support the economy are focused around:

The supply of new housing.
The environment.
Realisation of capital through the sale of Government assets.

Defined terms

The following defined terms are used in this Update:

FA 2003: Finance Act 2003.
FB 2009: Finance Bill 2009.
HMRC: HM Revenue & Customs.
REITs: Real Estate Investment Trusts.
SDLT: Stamp Duty Land Tax.
VAT: Value added tax.

Support for homebuyers

SDLT "holiday" extended

The 2009 Budget announced that the temporary increase in the SDLT threshold to £175,000 for residential properties will continue until 31 December 2009, instead of ending on 2 September 2009.

In September 2008, the SDLT threshold for land transactions consisting entirely of residential property, increased from £125,000 to £175,000. The revised threshold applies to transactions that have an effective date (normally completion) between 3 September 2008 and 2 September 2009 inclusive. The effect of this temporary increase was to exclude residential transactions for chargeable consideration of up to (and including) £175,000 from a charge to SDLT. The change to the threshold was referred to as an SDLT "holiday".

The Government has announced that the "holiday" will not end on 2 September 2009, but will instead continue until 31 December 2009. The SDLT threshold will return to £125,000 for transactions with an effective date of 1 January 2010 or later.

The extension of the "holiday" may prove useful to anyone buying residential property in 2009, but it is unlikely to provide major stimulus to the housing market. Even though property prices have fallen, many homes are still too expensive to benefit from the increased threshold. Furthermore, the measure does nothing to encourage banks to lend to prospective buyers.

For more information on the introduction of the "holiday", see Legal update, SDLT threshold on residential property increased to £175,000 and other housing measures announced.

(See 2009 Budget - BN45 - Stamp Duty Land Tax: Temporary Increase in Thresholds).

For other issues relating to SDLT raised by the 2009 Budget, see note, Stamp Duty Land Tax.

Extension of Homebuy Direct and social housing investment

The 2009 Budget announced that the Government is to extend the shared equity scheme, Homebuy Direct.

The funding for the extension of Homebuy Direct is part of the £600 million funding package announced to support the housing industry (see note, Support for the housing industry).

Support for homeowners

The Government is concerned to support homeowners who have lost their jobs and as a result are facing problems making their mortgage payments.

On 21 April 2009, the Government announced the launch of the UK Homeowners Mortgage Support Scheme. This is designed to give breathing space to homeowners suffering from a temporary loss of income. Eligible borrowers will be able to reduce their monthly mortgage interest payments for up to two years without being at risk of losing their home during that time.

For details, see Legal update, Prime Minister announces launch of Homeowners Mortgage Support Scheme.

Local Housing Allowance

The Government is reforming the Local Housing Allowance (LHA) to make it more equitable and to promote work incentives.

From April 2010, households will no longer be able to retain any of the surplus if the LHA that they receive is higher than their rent.

This measure only affects surpluses, so it should not produce rent shortfalls for either landlords or tenants.

For anyone already receiving LHA, this reduction will not apply until the anniversary of their claim.

Support for the housing industry

Building more homes

HM Treasury announced in the 2009 Budget that it is to provide a £600 million funding package of measures to enable stalled house-building projects to be unlocked. The package includes £100 million for local authorities to build new social housing at higher energy efficient standards. For more information, see note, Energy efficient buildings.

In the Housing Green Paper, the Government announced its intention that three million new homes should be built by 2020 (see Legal update, Housing Green Paper is published). The economic downturn has had a significant impact on the construction industry and the housing market. Many house-building projects that have been started, have been moth-balled pending a recovery in the markets. Other planned projects have been put on hold.

It is hoped that the funding package will have the short term effect of stimulating housing development and the longer term effect of boosting the capacity of the house-building industry.

Support for developers and businesses

Business rates: deferral scheme

The Government announced in the 2009 Budget that regulations will be introduced to allow businesses to defer payment of 60% of the increase in their 2009-10 business rates bills, the deferred amounts being added to the 2010-11 and 2011-12 bills. (See 2009 Budget - Chapter 5 - Helping people fairly.)

The aim of the regulations will be to smooth the effects of the spike in inflation in September 2008 and will apply to businesses in both England and Wales. For more information, see Legal update, Proposals for payment of increase in business rates to be deferred.

In addition, measures will be introduced to allow those affected by the end of the small business rate relief, which came into force on 1 April 2005, to pay the consequential increase in the bills over three years. For more information, see Legal update, New business rate relief regulations come into force in 2005.

(See 2009 Budget - PN01 - Building Britain's future: Business rates.)

Comment: There is nothing in the 2009 Budget to address the consequences for property owners of losing the empty property rates relief. The BPF has campaigned for legislation to be introduced to allow relief to be immediately reapplied. The BPF has confirmed that it will continue to press for this reform.

Community Infrastructure Levy

The Government announced in the 2009 Budget that the introduction of the community infrastructure levy (CIL) will be delayed until 6 April 2010.

See 2009 Budget - Chapter 5 - Helping people fairly: paragraph 5.80.

For information on CIL, see Practice note, Community Infrastructure Levy.

Insolvency consultations

In June 2009, the Insolvency Service will launch a consultation on measures designed to help companies in financial difficulties. It will consult on:

Providing for new funding lent to companies in Company Voluntary Arrangement (CVA) or administration, to have priority status.
Extending the moratorium on creditor actions against small companies trying to agree a CVA, to medium and large companies.

(See 2009 Budget - Chapter 4 - Supporting Business.)

In addition, the Insolvency Service will publish the first of a series of reports on the monitoring of "pre-pack" sales. These reports will be designed to alleviate creditors' concerns that the "pre-pack" sale process is being abused, to the prejudice of creditors. This follows an invitation in February 2009 by the Insolvency Service, for complaints to be submitted by those who felt unduly disadvantaged by a "pre-packaged" sale.

For further information on the complaints process, see The Insolvency Service: how to complain about the misuse of the "pre-pack" administration process.

(See 2009 Budget - PN01- Building Britain's future: Insolvency package.)

Stamp duty land tax

SDLT rates

The rates of SDLT are unchanged, although the SDLT "holiday" for residential properties selling at £175,000 or less has been extended until the end of 2009. For more information, see note, SDLT "holiday" extended.

SDLT relief for purchases by profit-making social housing providers

Profit-making companies that provide social housing will be entitled to relief from SDLT where the purchase of land is funded with the assistance of public subsidy.

Certain purchases of land by Registered Social Landlords (RSLs) are exempt from SDLT under section 71 of the FA 2003. Provisions in the Housing and Regeneration Act 2008 will replace RSLs with a new system of Registered Providers of Social Housing (Registered Providers). Those provisions are not yet in force, but the new system for social housing will be open to profit-making companies.

The FB 2009 will contain provisions to allow profit-making Registered Providers to use the SDLT relief for land transactions where the purchase is funded with the assistance of public subsidy. This change will have effect for land transactions where the effective date for SDLT purposes is on or after the date on which the FB 2009 receives Royal Assent.

The relief from SDLT is of great benefit to RSLs and the Government obviously wants to ensure that profit-making Registered Providers are not disadvantaged, compared to not-for-profit bodies.

(See 2009 Budget - BN44 - Stamp Duty Land Tax: Treatment of Shared Ownership).

SDLT relief for shared ownership sales by profit-making social housing providers

Buyers who purchase under shared ownership schemes operated by profit-making social housing providers will benefit from SDLT relief where the scheme is assisted by public subsidy.

A shared ownership purchaser may benefit from relief from SDLT, where the purchase is made from certain "qualifying bodies", a term which includes Housing Associations and Housing Action Trusts. As mentioned in note, SDLT relief for purchases by profit-making social housing providers, the new system for social housing provided for in the Housing and Regeneration Act 2008 will allow profit-making companies to provide social housing. The relief will be extended to anyone who takes a shared ownership lease from such a provider, where the shared ownership scheme is assisted by public subsidy.

This change will have effect for land transactions where the effective date for SDLT purposes is on or after the date on which the FB 2009 receives Royal Assent.

For more information on reliefs for social housing, see:

Practice note, SDLT reliefs for residential property: The reliefs.
Legal update, 2008 Budget: Shared ownership leases and SDLT.

(See 2009 Budget - BN44 - Stamp Duty Land Tax: Treatment of Shared Ownership.)

Simplification of SDLT for "Rent to HomeBuy" purchasers

The SDLT treatment of "Rent to HomeBuy" schemes will be simplified where the effective date of the grant of the shared ownership lease, or the declaration of the shared ownership trust, is on or after 22 April 2009.

"Rent to HomeBuy" schemes were announced in 2008, to supplement other types of "HomeBuy" schemes. "Rent to HomeBuy" was aimed at first-time buyers who were unable to buy a share of a property through other HomeBuy schemes at that time, but who might be able to do so in the future. The "Rent to HomeBuy" scheme allows such buyers to rent a newly-built property for a specified period, at less than the market rent. At the end of that period (or sooner if the tenant is able), the tenant has the option to buy a share of the property.

The SDLT treatment of "Rent to HomeBuy" schemes proved to be complicated, and a simplified approach will apply where the effective date of the grant of the shared ownership lease, or the declaration of the shared ownership trust, is on or after 22 April 2009.

For more information on "Rent to HomeBuy", see Legal update, New "Rent to HomeBuy" scheme announced

(See 2009 Budget - BN44 - Stamp Duty Land Tax: Treatment of Shared Ownership.)

SDLT exemption for leasehold enfranchisement

For transactions with an effective date on or after 22 April 2009, SDLT relief will be available to the nominee purchaser that acquires the freehold of a block of flats on behalf of leaseholders exercising a statutory right of collective enfranchisement.

Tenants with long leases (ones granted for a term of over 21 years) of flats may have a collective right to buy the freehold (and any intermediate leasehold interests) of the building under the Leasehold Reform, Housing and Urban Development Act 1993 (LRHUDA 1993).

The purchase of the freehold of the block is made by a nominee purchaser, which is typically a special purpose company owned by the tenants who participate in the enfranchisement. The Commonhold and Leasehold Reform Act 2002 (CLRA 2002) includes provisions that would require collective enfranchisement to take place through a right to enfranchise company (RTE company) (sections 121–124,CLRA 2002). However, apart from section 122 of the CLRA 2002, these provisions are not yet in force, and so it is not possible to use an RTE company as the nominee purchaser.

Section 74 of the FA 2003 grants relief from SDLT on collective enfranchisement, where the entity acquiring the freehold is an RTE company. The relief operates by allowing the SDLT charge to be calculated at a rate determined by dividing the total consideration by the number of flats involved.

For land transactions with an effective date of 22 April 2009 or later, the rules will change, and the relief will no longer be available only to RTE companies. This will mean that the purchaser nominated by the tenants to take ownership of the freehold of the block of flats will be able to use the relief, even though it is not an RTE company.

This change will be welcome, because the relief was not available until the provisions relating to RTE companies came into force. It is not clear if this amendment means that there is no current intention to bring those provisions into force.

For more information on collective enfranchisement, and the problems associated with restricting the SDLT relief to RTE companies, see:

Practice note, Enfranchisement and lease extension in relation to flats.
Practice note, SDLT reliefs for residential property: The reliefs.
Legal update, SDLT: collective enfranchisement relief (High Court).

(See 2009 Budget - BN46 - Stamp Duty Land Tax: Leasehold Enfranchisement.)

SDLT on bulk purchases of residential property

Despite the BPF's campagin, the Chancellor has not implemented changes to SDLT so that bulk purchases of residential property are taxed at the marginal rate applicable to each unit. SDLT will continue to be determined by the price paid for a whole portfolio rather than by the value of its individual units. The BPF claims that this is a disincentive against larger scale investment in residential property.

VAT

The 2009 Budget contains number of VAT measures affecting property and these are set out in outline below.

For more information on VAT measures in the 2009 Budget, see PLC Tax, Legal update, 2009 Budget: summary of key tax announcements: VAT.

Simplification of the procedure for opting to tax land and buildings

The procedure for opting to tax land and buildings will be simplified. There will be:

The introduction of a new automatic permission conditions (see note, New automatic permission condition to take effect on 1 May 2009).
The withdrawal of two informal concessions (see note, Withdrawal of two informal concessions on 1 May 2010).

New automatic permission condition to take effect on 1 May 2009

Currently, tax payers that have previously made exempt supplies of land and buildings and then wish to opt to tax them require formal permission from HMRC unless they meet any one of four automatic conditions (automatic permission conditions).

For more background information on the option to tax where previous exempt supplies have been made, see Practice note, VAT and property: the option to tax: Where previous exempt supplies have been made.

A new automatic permission condition will be introduced to take effect on 1 May 2009.

The current automatic permission conditions are published in notice 742A (Opting to tax land and buildings). Condition 3 is to be replaced by the new automatic permission condition.

The new automatic permission condition and associated guidance will be published shortly in a HMRC Information sheet.

(See 2009 Budget - BN67 - VAT: Simplifying the Procedure for Opting to Tax Land and Buildings.)

Withdrawal of two informal concessions on 1 May 2010

Two informal extra-statutory concessions that HMRC operate in relation to the option to tax will be withdrawn on 1 May 2010.

These concessions require taxpayers to contact HMRC to agree that VAT may be recovered. They apply:

When a taxpayer registers for VAT as a result of opting to tax.
When a taxpayer that is already VAT registered opts to tax a property on which previous exempt supplies have been made.

HMRC will withdraw one of the informal concessions completely on 1 May 2010. The other concession will be withdrawn in part but will otherwise continue.

(See 2009 Budget - BN67 - VAT: Simplifying the Procedure for Opting to Tax Land and Buildings.)

Change of standard rate

The standard rate of VAT will return to 17.5% on 1 January 2010.

The 2008 Pre-Budget Report announced a temporary reduction in the standard rate of VAT to 15% for a thirteen month period from 1 December 2008 to 31 December 2009 (see Legal update, 2008 Pre-Budget Report - implications for Property: Temporary reduction in VAT standard rate).

The FB 2009 will introduce legislation for the rate to revert to 17.5% on 1 January 2010.

(See 2009 Budget - BN71 - VAT: Change of Standard Rate.)

Anti-forestalling legislation

The FB 2009 will introduce legislation to counter schemes that purport to apply VAT at the rate of 15% to goods or services to be supplied on or after 1 January 2010. The Financial Secretary to HM Treasury announced the scope of this legislation in two written ministerial statements on:

25 November 2008 (see Legal update, Standard rate VAT cut: anti-avoidance legislation announced).
31 March 2009 (see Legal update, Standard rate VAT cut: anti-avoidance legislation published).

(See 2009 Budget - BN72 - VAT: Change of Standard Rate: Anti-Forestalling Legislation.)

Real Estate Investment Trusts

The Chancellor has fixed some technical flaws in the existing legislation for REITs. The FB 2009 will introduce legislation to take effect on 22 April 2009 permitting:

Regulations to be made that prevent artificial restructuring.
Current legislation allows groups to split their activities into more than one group as defined for REIT purposes, although both groups remain under the same economic ownership. This allows members of an economic group to rent property to other members of the same economic group, with that income then being treated as income of the property rental business. As a result, previously non-qualifying groups could become groups that comply with the REIT legislation.
REITs to raise funds by issuing convertible preference shares.

Legislation will also be amended so that:

Owner-occupied properties are excluded from the tax exempt business of the REIT.
The current obstacle in tax legislation that prevents potential REITs with "tied premises" from entering the regime is removed.

HM Treasury has not introduced any greater flexibility in the REITs rules, particularly with regard to the mandatory 90% distribution requirement. The property industry was keen for the Chancellor to make changes to permit the deferral of dividend payments and the payment to shareholders in stock, rather than cash, to maintain liquidity. REITs would have welcomed any measure that helped them conserve cash, as their loan-to-value covenants are strained and new debt is difficult and expensive to obtain.

For background information on REITs, see Practice note, UK REITs: questions and answers.

For more information on REITs, see:

Capital allowances

A first-year allowance of 40% will be available for expenditure incurred on plant and machinery in the 12 month period commencing 1 April 2009 (for the purposes of corporation tax) or 6 April 2009 (for the purposes of income tax), and will apply to expenditure that would otherwise qualify for a writing-down allowance in the general pool at the rate of 20%. This is to allow a higher proportion of private investment to be offset in that year against taxable profits.

Firms investing over £50,000 in qualifying plant and machinery in 2009-10 will benefit from the higher rate of tax relief on investment. The 95% of firms that currently invest up to £50,000 will continue to benefit from the Annual Investment Allowance that enables businesses to offset their capital expenditure against taxable profits.

For more information, see PLC Tax, Practice note, 2009 Budget: key tax announcements: Capital allowances: 40% first-year allowance for one year.

For information on capital allowances in a property context, see Practice note, Capital allowances on property transactions.

(See 2009 Budget - Chapter 4 - Supporting business.)

Pilot City-Regions

In the 2009 Budget, the Government announced new pilot City-Regions in Greater Manchester and Leeds (pilots).

The pilots and the Government will:

Agree joint priorities to support economic growth.
Develop new joint investment boards with Regional Development Agencies (RDAs), the Homes and Communities Agency (HCA) and other partners.

The Government will work with the pilots (and interested local authorities) to assess how regeneration could be financed from property taxes. The Government will report on its findings in the 2009 Pre-Budget Report.

The Government is bringing forward £775 million of housing and regeneration investment. £180 million will be spent on regeneration through the HCA and RDAs in 2009-10.

The Government is also working with partners in the West Midlands in respect of a proposed accelerated development zone.

In addition, the Government will launch the "Total Place" initiative, to examine how to achieve greater efficiency and value for money in public spending and local leadership. There are 13 areas taking part in "Total Place", including the Manchester city-region and Bradford (with links to the Leeds city-region).

(See 2009 Budget - Chapter 4 - Supporting Business.)

Support for the environment

Existing policies have enabled £50 billion of low-carbon investment over the three years to 2011. The 2009 Budget provides an additional £1.4 billion of additional targeted support in the low-carbon sector.

The 2009 Budget sets the world's first carbon budgets, as required by the Climate Change Act 2008. These set a legally binding 34% reduction in emissions for the UK by 2020.

The easiest way to cut carbon emissions is by saving energy. Budget 2009 announced a number of measures to support energy saving (see note, Energy efficient buildings), as well as investment in low-carbon projects (see note, Low carbon projects).

Energy efficient buildings

The 2009 Budget announced:

An additional £375 million to support energy and resource efficiency in businesses, public buildings and households over the next two years.
An additional £70 million for decentralised small-scale and community low-carbon energy.

It is expected that this spending, together with the measures to insulate one million homes in 2008-9, will save 380,000t CO2 and around £60 million in energy bills each year.

For more information, see PLC Environment, Legal update, Budget 2009: environmental announcements.

Low carbon projects

The Government is to establish a £750 million Strategic Investment Fund to support advanced industrial projects of strategic importance. £250 million of this fund will be earmarked for low carbon investments.

In addition, £500 million of additional spending (part of an overall £1.4 billion package) will be directed to support Britain's low-carbon sectors. This includes support for offshore wind investments.

For more information, see PLC Environment, Legal update, Budget 2009: environmental announcements.

Raising capital through operational efficiency

Asset management and sales of public buildings

The Government has announced that it accepts the recommendations contained in the Operational Efficiency Programme: final report (OEP report). This may result in the future sale of surplus public buildings.

In its Comprehensive Spending Review 2007, the Government announced the implementation of a more strategic approach to the management of public assets and the disposal of surplus fixed assets. For details, see Legal update, 2007 Pre-Budget Report - implications for Property.

In the 2008 Budget, the Government launched an Operational Efficiency Programme (OEP) to examine the opportunities for efficiency savings. The OEP report was published on 21 April 2009. It concludes that there is potential to realise greater value from the public sector's asset base and this may involve disposals in some cases. The OEP report summarises the progress to date on specific studies including:

British Waterways.
Ordnance survey.
The Land Registry.
The Dartford Crossing.

There will be a further report made at the 2009 Pre-Budget with proposals for the next steps. The OEP has also identified a short-list of other assets for study in the coming months.

In addition, the OEP has examined how efficiently the public sector is using its property and in particular, its office space. The OEP report has identified substantial running cost efficiencies and £20 billion of proceeds from possible property sales (excluding council housing). The OEP report recommends setting up a strategic central property function to drive these property efficiencies.

Other items of potential interest

The following items will also be of interest to property practitioners:

Anti-avoidance measures

The 2009 Budget announced a number of anti-avoidance measures.

The following are of particular interest to the property industry:

Service related living accommodation (see note, Service related living accommodation).
Identifying users of disclosed SDLT avoidance schemes (see note, Identifying users of disclosed SDLT avoidance schemes).
Compliance checking (see note, Record-keeping and time limits).

For more information on the above and other measures, see PLC Tax, Legal update, 2009 Budget: summary of key tax announcements.

Service related living accommodation

The FB 2009 will contain legislation to stop a scheme for avoidance of tax on the benefit of living accommodation using lease premiums.

The benefit of living accommodation provided by an employer to an employee is generally taxable. If the employer pays the rent on a property, the taxable benefit is based on the amount of rent actually paid by the employer. To avoid paying tax, some service occupancies provide for the payment of a premium followed by a reduced rent.

Under the proposed legislation, a lease premium paid by the employer on a lease of up to ten years will be subject to the same tax treatment as rent, with the lease premium spread over the duration of the lease. The new legislation will apply to leases entered into or extended on or after 22 April 2009.

For more information on service occupancies, see Standard document Service occupancy agreement and drafting note.

(See 2009 Budget - BN56 - Living Accommodation Provided by Reason of Employment: Payment of Lease Premiums.)

Identifying users of disclosed SDLT avoidance schemes

The Government intends to progress its policy of ensuring that SDLT is not avoided on the purchase of UK property, by introducing measures that will help HMRC identify people who use disclosed tax avoidance schemes.

Record-keeping and time limits

The compliance checking framework set out in Schedules 36, 37 and 39 to the Finance Act 2008 will be extended to other taxes, including SDLT, Insurance Premium Tax and environmental taxes (aggregates levy, climate change levy and landfill tax).

Islamic finance

The Government is keen to promote the growth of the Islamic finance market in the UK. To do this, the Government must deal with the uncertain or disadvantageous tax treatment that Islamic financial products may receive.

The Government will progress the alignment of the tax treatments of alternative and conventional finance products by:

Providing for the relief from SDLT and capital gains tax in respect of transactions undertaken as part of the issue of alternative finance property investment bonds. The FB 2009 will contain provisions that will give relief from SDLT and capital gains tax to persons who wish to use land assets as security in alternative financial arrangements.
Clarifying how the capital allowances regime will interact with these changes to SDLT and capital gains tax.

For more information on the Government's intentions, see:

Further investment in accommodation for the Armed Forces

A further £50 million is earmarked for Armed Forces accommodation, meaning that an additional 600 service men and women and their families will benefit from rebuilt and upgraded accommodation in 2009.

Extension of inheritance tax agricultural property and woodlands reliefs

The FB 2009 will extend inheritance tax agricultural property and woodlands reliefs to property in the European Economic Area.

(See 2009 Budget - BN50 - Inheritance Tax: Extension of Agricultural Property and Woodlands Reliefs to Land in the European Economic Area.)

Furnished holiday lettings in the European Economic Area

As part of the 2009 Budget, the Government has published a Technical note on Furnished Holiday Lettings (FHL) in the European Economic Area (EEA).

Under the Furnished Holiday Lettings rules (FHL rules), landlords with income from furnished holiday accommodation in the UK are treated as if they are trading for certain tax purposes, as long as they meet certain conditions. Landlords with income from furnished holiday lettings outside the UK but elsewhere in the (EEA) do not qualify for this treatment.

It has been recognised that this divergence in treatment may not be compliant with European law. As a result, the Government has decided to repeal the FHL rules with effect from 2010-11.

Until then, it will also treat the FHL rules as applying to landlords with income from furnished holiday accommodation elsewhere in the EEA.

(See 2009 Budget - Furnished Holiday Lettings in the European Economic Area.)

Land which temporarily loses charitable status

HMRC has announced that, with effect from 1 April 2010, it will withdraw its extra-statutory concession for capital gains tax and income tax charges in relation to land given for charitable purposes that temporarily loses its charitable status.

(See 2009 Budget - supplementary document - Withdrawal of Extra-statutory Concessions.)

Funds

From 1 September 2009, a new tax regime for UK Authorised Investment Funds (AIFs) will be introduced to enable AIFs to market themselves more competitively.

The Government will also legislate to clarify how certain transactions involving AIFs (and their offshore equivalents) will be taxed.

For further information, see PLC Tax, Legal update, 2009 Budget: summary of key tax announcements.

2009 Budget: implications for property | Practical Law