On Wednesday 13th March, Chancellor Philip Hammond will once again be dusting off the famous red briefcase and standing in front of the House of Commons to deliver another fiscal statement.
Following his move into 11 Downing Street, Hammond was quick to reorder the Government’s two major annual financial announcements. Now it is the Autumn Budget that includes the more significant revelations, with the Spring Statement – taking place next week – acting as a review of the UK’s economic status, with a few policy updates provided at the same time.
However, this year’s Spring Statement takes on added importance given its timing. On the one hand, it comes just 24 hours after MPs vote on Prime Minister Theresa May’s Brexit deal. On the other hand, the speech is being made a mere 16 days before the deadline for the country’s departure from the EU.
But what can we expect from the so-called “mini budget”?
There are predictions that Hammond will introduce several tax reforms; something that might have been inspired after the news broke that January had the largest monthly surplus in public finances since records began in 1993. Moreover, tax breaks would be consistent with the theme of the 2018 Autumn Budget, in which he stressed that the era of austerity had come to an end.
These touted tax changes could impact property investors. For example, there are suggestions that the Chancellor will make amendments to inheritance tax and the main residence nil-rate band. The existing nil-rate band, the amount you can pass on after your death tax-free, has been £325,000 since 2009, but this figure could rise.
Furthermore, housing will likely remain high on the Chancellor’s agenda, and tax reforms could be introduced to help more people get onto or move up the property ladder. For example, tax cuts could be brought in for landlords selling a property to a first-time buyer. Alternatively, stamp duty could be reduced for investors purchasing a derelict or run down property.
MFS has long championed the introduction of realistic but creative measures to not only build more houses and flats, but also to do more to make the most of the existing housing stock. Tax reforms are one means of injecting fresh impetus into the real estate sector, and all eyes will be on Westminster next week to see what Philip Hammond pulls out of his red briefcase.
Looking beyond the Spring Statement, MFS is looking forward to exhibiting at a number of leading industry events, including the National Landlord Show at London Olympia on 21st March and the Property Investor Show in Excel London on 12th and 13th April. We hope to see many of you there.