A number of tax changes which have been introduced by the Chancellor will hopefully raise revenues, boost UK Business and encourage increased investment from outside the UK. Stamp duty is one area that will be changed as part of the proposals. Properties purchased through offshore companies currently pay 0.5 percent stamp duty, which will increase to 5 percent as part of the reform.
Investment from overseas is to be encouraged by the scrapping of tax charges when investing in the UK. Presently, non-domiciled investment in the UK is liable to the 50 percent tax rate or capital gains charge of 28 percent. The tax will be cut to zero for investment in a UK business. The tax system is to be simplified, with over 30 tax reliefs being scrapped which will reduce unnecessary bureaucracy. Research and Development credits are to be changed in an attempt to retain specialist companies in the UK, like Pfizer.
Currently, companies based in the UK are taxed on earnings overseas, according to the Controlled Foreign Companies legislation. This will be modified to prevent companies leaving the UK because of high taxation. A new scheme, Patent Box will be introduced with a 10 percent tax rate for entrepreneurs who are within this scheme, encouraging investment to remain in the UK.
In addition to making taxation simpler and creating incentives for UK investment, wealthy people who live in the UK and own businesses and work in the UK will face tightened rules for non resident status, to ensure the full taxes are paid.
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