21/22 Property Investor Tax Update
This article will provide a quick update on tax for year commencing 6 April 2021 and the impacts on property investors.
England, Wales & Northern Ireland General Tax Updates
The personal allowance has increased to £12,570.
The dividend allowance remains at £2,000.
The basic rate limit increases to £37,700.
Higher rate threshold £50,270.
Employer and employee National Insurance Contribution (NIC) thresholds have changed to £170 per week for employer NICs and £184 per week for employees.
The upper earnings limit for employees increases to £967 per week, or £50,270 per year.
Optimal Limited Company Director Salary From 6 April 2021
£8,840 per annum*:
No requirement to pay employer’s NI (as at the secondary threshold).
No requirement to pay employee’s NI (lower than the primary threshold).
Still earns you credits towards state pension (above the Lower Earnings Limit).
Assuming no other income this amount is less than the tax-free Personal Allowance threshold (£12,570).
*increases to £9,568 per annum if two or more directors in company due to employment allowance:
Additional 2% Stamp Duty Land Tax charge for non-UK residents
Extension of the COVID-19 SDLT 'holiday'
The temporary increase in the nil rate band of £500,000 for residential purchases in England and Northern Ireland has been extended until 30 June 2021.
This will decrease to £250,000 between 1 July 2021 to 30 September 2021. It will return to the standard amount of £125,000 on 1 October 2021.
First Time Buyers’ Relief (which has no effect while the nil rate band is £500,000) will resume on 1 July 2021.
No Change to Capital Gains Tax
No Immediate change to Corporation Tax but will rise to 25% from 2023*
*for companies with profit > £50,000 CT will gradually increase from 19% to 25%. This therefore won't impact majority of limited companies.
If you need help understanding how these changes impact you specifically then please get in touch with us.
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