2017 Budget review for expats
Written on 22 November 2017
Today (22nd November 2017) saw Philip Hammond deliver the Budget for the UK economy. In a speech of nearly 8,000 words and lasting around an hour, he laid out a few things for expats to be aware of, however, the brevity of this article underlines just how little was actually contained within the Budget itself which may directly affect British expats.
Firstly, it’s worth noting that this is, in realistic terms anyway, the final Budget before Britain officially leaves the EU on the 29th March. While there will be a Budget in 2018, it is felt that any changes or announcements will come too late to be able to have a significant impact on the UK in time for Brexit.
Therefore, the key thing to note is that close to £1bn has been spent so far working out how Brexit will happen and there is a further £3bn set aside for the immediate Brexit fallout – however that may look. This suggests that this is an emergency fund in the event of a no-deal Brexit – i.e. that the Government is realistically contemplating leaving the EU with no deal in place.
However, as with everything Brexit at this point, the lack of detail still means it is relatively difficult to know how it will look for anybody, either living in the UK or living in the EU.
There are no major surprises or changes with regards to personal tax. The personal tax allowance (£11,500 in 2017/18) will rise to £11,850 for the tax year 2018/19 and it is still expected to reach £12,500 by 2020.
This means that you would have to earn £11,850 in the UK as a non-resident before having to pay any tax. As always, you will still need to consider completing a self-assessment tax return and this does not affect the tax you may have to pay in your country of residence.
For high earners, the tax threshold for the upper rate of tax will increase to £46,250 – although this is unlikely to affect many non-residents as it will only affect income from the UK.
Stamp Duty Land Tax
For first time buyers, there will no longer be any Stamp Duty to pay on properties bought for less than £300,000. If a property is bought by a first time buyer above that value, the first £300,000 will be exempt and then a 5% will be payable on the amount over £300,000.
For example, a first time buyer buying a house for £500,000 will pay no stamp duty on the initial £300,000, but 5% on the remaining £200,000.
Whether this will have any significant impact on non-residents remains to be seen, however it affects anybody buying a property for the first time.
It has been announced that local councils will have the authority to increase council tax by 100% to any properties which remain empty for two years or more. This is up from 50% (although the rules are different in Scotland).
Pensions and QROPS
There were no significant changes to pensions or QROPS for non-residents – and it has been rumoured that there will be no further changes to QROPS rules until 2020 at the earliest.
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