Finance Act 2010

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Extract

Finance Act 2010

An Act to grant certain duties, to alter other duties, and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with finance.

[8 th April 2010]

Most Gracious Sovereign

WE, Your Majesty’s most dutiful and loyal subjects, the Commons of the United Kingdom in Parliament assembled, towards raising the necessary supplies to defray Your Majesty’s public expenses, and making an addition to the public revenue, have freely and voluntarily resolved to give and to grant unto Your Majesty the several duties hereinafter mentioned; and do therefore most humbly beseech Your Majesty that it may be enacted, and be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

Part 1 Charges, rates etc

Income tax

1 Charge, main rates, thresholds and allowances etc for 2010-11

(1) Income tax is charged for the tax year 2010-11.

(2) For that tax year—

(a) the basic rate is 20%,

(b) the higher rate is 40%, and

(3) The amounts specified in the following provisions of ITA 2007 are the same for the tax year 2010-11 as for the tax year 2009-10—

(a) sections 10(5) and 12(3) (basic rate limit and starting rate limit for savings) ,

(b) sections 35 , 36(1) , 37(1) and 38(1) (personal allowances and blind person’s allowance) ,

(d) sections 36(2) , 37(2) , 45(4) and 46(4) (adjusted net income limit).

Corporation tax

2 Charge and main rate for financial year 2011

(1) Corporation tax is charged for the financial year 2011.

(2) For that year the rate of corporation tax is—

(a)28% on profits of companies other than ring fence profits, and

(b)30% on ring fence profits of companies.

(3) In subsection (2) “ring fence profits” has the same meaning as in Part 8 of CTA 2010 (see section 276 of that Act).

3 Small profits rates and fractions for financial year 2010

(1) For the financial year 2010 the small profits rate is—

(a)21% on profits of companies other than ring fence profits, and

(b)19% on ring fence profits of companies.

(2) For the purposes of Part 3 of CTA 2010 , for that year—

(a) the standard fraction is 7/400 ths, and

(b) the ring fence fraction is 11/400 ths.

(3) In subsection (1) “ring fence profits” has the same meaning as in Part 8 of CTA 2010 (see section 276 of that Act).

Capital gains tax

4 Increase in entrepreneurs’ relief

(1) In section 169 N(3) of TCGA 1992 (limit on entrepreneurs’ relief)—

(a) for “£1 million” (in both places) substitute “£2 million”, and

(b) in paragraph (b) , after “total of” insert “so much of” and insert at the end “as was subject to reduction under subsection (2)”.

(2) The amendments made by subsection (1) have effect in relation to qualifying business disposals occurring on or after 6 April 2010.

Capital allowances

5 Annual investment allowance

(1) In section 51 A(5) of CAA 2001 (entitlement to annual investment allowance: maximum allowance) , for “£50 ,000” substitute “£100 ,000”.

(2) The amendment made by subsection (1) has effect in relation to expenditure incurred on or after the relevant date.

(3) Subsections (4) and (5) apply in relation to a chargeable period (“the actual chargeable period”) which—

(a) begins before the relevant date, and

(b) ends on or after that date.

(4) The maximum allowance under section 51 A of CAA 2001 for the actual chargeable period is the sum of each maximum allowance that would be found if—

(a) the period beginning with the first day of the chargeable period and ending with the day before the relevant date, and

(b) the period beginning with the relevant date and ending with the last day of the chargeable period,

were treated as separate chargeable periods.

(5) But, so far as concerns expenditure incurred before the relevant date, the maximum allowance under section 51 A of that Act for the actual chargeable period is to be calculated as if the amendment made by subsection (1) had not been made.

(6) In this section “the relevant date” means—

(a) for corporation tax purposes, 1 April 2010 , and

(b) for income tax purposes, 6 April 2010.

Stamp duty land tax

6 Relief for first-time buyers

(1) Part 4 of FA 2003 (stamp duty land tax) is amended as follows.

(2) After section 57 A insert—

“57 AAFirst-time buyers

(1) A land transaction is exempt from charge under section 55 if—

(a) it is a relevant acquisition of a major interest in land,

(b) the land consists entirely of residential property,

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