Stamp duty land tax (SDLT) nil rate band expanded to GBP 250,000 from GBP 125,000. So no stamp duty land tax is payable if the property you buy costs less than GBP 250,000.
If you are a first time buyer, then the Stamp duty land tax (SDLT) threshold increased from GBP 300,000 to GBP 450,000.
These are positives to make the initial purchase of a house 🏠 cheaper. However, the interest rates are going up not only in the UK but globally, would make house purchase cost more expensive. Furthermore, rising borrowing costs, all things being equal would lead to a drop in property prices. Hence, house buyers who take advantage of the reduction in cost of purchasing a house, may have an unintended consequence of the drop in price of the house. Hence, lender’s would be requiring higher deposits. This might not happen as the Financial market have given the GBP a beating against the US Dollar, which would lure foreign investors to invest in UK Real Estate 🤔.
I would have expected that full borrowing costs would be made available against individual (buy to let) rental income, as before. Currently, individual rental property owners can only claim 20% of interest cost, as credit against tax payable. This could be considered discrimination against individual ownership of rental property by individuals as opposed to rental property owned by companies, which have full borrowing cost allowable for tax purposes.
Companies
The additional 3% stamp duty land tax remains payable.
However, the announced increase of the corporation tax rate from 19% to 25% from 6th April 2023 was reversed.
The dividend tax rate on basic band was reduced from 8.75% to 7.5%. This gives shareholders more cash in hand.
There are investment zones with significant tax incentives. Investment Zones will comprise both Commercial , industrial and residential development in the designated area. This will lead to a more buoyant real estate sector.
Things to look forward
The free ports and investment Zones, regulations and tax incentives which will come with them. We look forward to the tax measures (time limited) for companies . It has been prefential free trade areas or zones which have made cities/states like Dubai (UAE), Singapore 🇸🇬 and Mauritius 🇲🇺 trading giants. The United Kingdom has historically grown to be a global power due to trade, which it needed to protect using its Navy, which enabled it to become a great Global power.
The eight English Freeport locations announced are:
Another thing to develop and strengthen is greater trade and finance between Commonwealth countries. The ties of the British Crown with the Commonwealth was emphasised during the the Funeral of her Majesty Queen Elizabeth II. The free trade agreements with Commonwealth countries should be aggregated into a Commonwealth wide Free Trade Common market.
These Freeports and Investment zones will spur real estate investment and create opportunities for commercial, retail, industrial, residential development. In Birmingham the investment zone is going to be in the Solihull area.
We remain positive and optimistic about growth and opportunity for trade, investment and finance in the UK. Foreign investors should take advantage of the weak Sterling Pound – GBP against the US Dollar and invest in the UK. As growth will be realised in the mid-term, and the GBP will strengthen significantly against the US Dollar and other major currency in 2-3 years.
Published by Mohamed Ebrahim, MBA, CeMap, MLIBF, MCSI
Mohamed Ebrahim
Mohamed is an author of books related to Islamic Finance, Financial Reporting, Accountancy, and related topics. https://authorcentral.amazon.com/gp/books
Mohamed, is currently based in Birmingham, West Midlands, England, United Kingdom and is a Co-founder, CEO and Director of a Start-up Everest Fin Edu Tech Limited. He utilises his training and experience of over 25 years to find funding solutions for individuals, businesses and property buyers, investors and developers especially for the SME'S.
Mohamed, is a Senior Partner with Ace Associates LLP - Certified Public Accountants & CEO of Ace Financial Advisory Limited, he is a CPA Kenya and holds an MBA from The University of Manchester (UK) and B.A (Hons) from Manchester Metropolitan University, He has worked for over 25 years with firms in Kenya -Ernst & Young – Assurance Advisory Business Service & Tax Service lines, PKF Kenya Audit Senior, and Devani –Devani & Co. United Arab Emirates -Group Financial Controller - Credo Investments FZE. Canada – Mc Tavish & Co. CPA’s.
A member Institute of Directors (Kenya) and Non-Executive Directors Association (UK). He served on the ICPAK Coast Branch, Executive Council as Secretary and CPD Convener (2013-15) and from May 2016 to May 2018. Vice-Chair May 2018 to June 2020. He was commended by ICPAK in June 2015 for his services to the Accounting profession by ICPAK. Furthermore, Mohamed Ebrahim was awarded a Fellowship of the Institute of Certified Public Accountants of Kenya on.11th December 2020.
Educational & Professional details.
Mohamed speaks English, Gujerati, Hindi, Urdu, Swahili. Born in an Indian immigrant family from Gujerat India, settled on the Swahili Coast of East Africa for four (4) generations,
Bachelor of Arts (Hons) – Sustainable Performance Management
Manchester Metropolitan University
Master of Business Administration
The University of Manchester – Manchester Business School
Certified Islamic Finance Executive (CIFE)
Advanced. Certified Islamic Finance Executive in Islamic Accounting
Ethica Institute of Islamic Finance, Dubai, UAE.
ACMA, CGMA, Member, Chartered Institute of Management Accountants and Association of International Certified Professional Accountants, registered as a CIMA Member in Practice.
CPA, Practicing member
Institute of Certified Public Accountants of Kenya
FCFIP, Fellow Member -International Institute of Certified Forensic Investigation Professionals
FCT, Fellow Member, Fellow Chartered Treasurer
FFA – Fellow of the Institute of Financial Accountants
MCIArb - Chartered Institute of Arbitrators, Full Member.
MCSI: Member, Chartered Institute of Securities & Investments
Institute of Internal Auditors - Member
Currently, a Doctoral Student at the Edinburgh Business School, completed the Coursework stage, working on the doctoral thesis
Interim Award - Post Graduate Certificate in Business Research methods
Short Courses and MOOC’s
• The World Bank Group's MOOC on Financing for Development.
• Financial Markets an online non-credit course authorized by Yale University, facilitator being Professor Robert Shiller – 2013 recipient of Nobel Prize in Economic sciences
• Principles of Valuation: Time Value of Money authorized by University of Michigan
• Islamic Financial & Capital Markets -101 - & Structure and Trading of Sukuk102 – by Islamic Research and Training Institute
• Islamic Finance & Banking 101 & 102 – Islamic Modes of Finance - by Islamic Research and Training Institute
• University Teaching MOOC on Coursera by Hong Kong University.
• Oxford Brookes University Business School – Online mentoring Course
• ICPAK - Training of Trainers
PRESENTATIONS AND PUBLICATIONS
Professional Conference paper
IICFIP 2014 Global Conference “Creating a Business Culture based on ethics”
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2528554
MBA Dissertation
Risk Management in Islamic Financial Institutions
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2528463
Publications in Professional Journals
The Accountant – Journal of the Institute of Certified Public Accountants of Kenya
• Tax Reforms 1 – Time for a Flat Tax system in Kenya – February- March 2012 issue
• Tax Reforms 2 – Specific Tax Simplification Reforms – April –May 2012 Issue
• Risk Management in Islamic Financial Institutions – December-January 2013 issue
Africa Islamic Finance Report (Volume 1 no, 2)- April- June 2016
• A case for Islamic Sharia Compliant Real Estate Investment Trust (Islamic REITS) in Kenya
Others
Islamic Home Financing https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2618458
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