Budget Summary 2016/17

Other Measures

Inheritance Tax

As previously announced, the nil rate band remains frozen at 325,000 and the 'residential enhancement' to the nil rate band will be introduced from 6 April 2017. The latter will increase from 100,000 to 125,000 over the course of the Parliament and applies when a home is left, broadly, to a direct descendent.

Finance Bill 2016 will include the promised 'downsizing' provisions, so that the enhancement will still be available in some circumstance when a home is not being left on death.

Making tax digital

From 2018 businesses, the self-employed and landlords who are keeping their tax records digitally and providing regular digital updates to HMRC will have the option to adopt pay-as-you-go payment patterns. HMRC say this will enable them to choose a payment system that suits them and help them to better manage their cashflow. It will also improve cashflow for HMRC and may eventually become compulsory.

Insurance Premium Tax

The rate of Insurance Premium Tax will rise to 10% from its current level of 9.5% from 1 October 2016. The money raised from this increase will be used to fund work on flood defences.

Museums and galleries

A new tax relief is to be introduced from April 2017 for museums and galleries in respect of temporary and touring exhibition costs.

Correcting past offshore non-compliance

A legal requirement is to be introduced to correct past offshore noncompliance within a defined period of time. New sanctions will apply to those who fail to meet the deadline.

General Anti-Abuse Rule (GAAR)

A new penalty of 60% of the tax charged will apply to all cases successfully challenged by the GAAR. Small changes will also be made to the GAAR to improve its ability to tackle marketed avoidance schemes.