Finance Act 2010

JurisdictionUK Non-devolved
Citation2010 c. 13
See commencement information

Finance Act 2010

2010 CHAPTER 13

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.

[8th 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:-

1 Charges, rates etc

Part 1

Charges, rates etc

Income tax

Income tax

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

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

(c) the additional rate is 50%.

(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),

(c) sections 43, 45(3)(a) and (b) and 46(3)(a) and (b) (tax reductions for married couples and civil partners), and

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

Corporation tax

Corporation tax

S-2 Charge and main rate for financial year 2011

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).

S-3 Small profits rates and fractions for financial year 2010

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 7/400ths, and

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

(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

Capital gains tax

S-4 Increase in entrepreneurs' relief

4 Increase in entrepreneurs' relief

(1) In section 169N(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

Capital allowances

S-5 Annual investment allowance

5 Annual investment allowance

(1) In section 51A(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 51A 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 51A 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

Stamp duty land tax

S-6 Relief for first-time buyers

6 Relief for first-time buyers

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

(2) After section 57A insert-

’57AA First-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,

(c) the relevant consideration (see section 55) for the transaction (other than any consisting of rent) is more than £125,000 but not more than £250,000,

(d) the purchaser, or (if more than one) each of the purchasers, is a first-time buyer who intends to occupy the residential property as the purchaser's only or main residence, and

(e) (subject to subsection (4)) the transaction is not one of a number of linked transactions.

(2) In this section‘first-time buyer’ means a person who-

(a) has not previously been a purchaser in relation to a relevant acquisition of a major interest in land which consisted of or included residential property,

(b) has not previously acquired an equivalent interest in such land under the law of a territory outside the United Kingdom,

(c) has not previously been, or been one of the persons who was,‘the person’ for the purposes of section 71A, 72, 72A or 73 in a case where the first transaction within the meaning of the section concerned was a relevant acquisition of a major interest in land which consisted of or included residential property, and

(d) would not have been such a person for those purposes in such a case if the provisions mentioned in paragraph (c) had been in force, and had had effect in the territory concerned, at all material times (subject, where required, to appropriate modifications).

(3) In this section‘relevant acquisition of a major interest in land’ means an acquisition of a major interest in land other than-

(a) the grant of a lease for a term of less than 21 years, or

(b) the assignment of a lease which has less than 21 years to run.

(4) Subsection (1)(e) does not prevent a transaction being exempt from charge under section 55 if each of the linked transactions is one the subject-matter of which is land, or an interest in or right over land, which falls within section 116(1)(a), (b) or (c) by reason of its connection with the same building.’

(3) After section 73C insert-

’73CA Sections 71A to 73: first-time buyers

(1) Where section 71A, 72, 72A or 73 applies, the first transaction within the meaning of the section concerned is exempt from charge under section 55 if-

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

(b) the land consists entirely of residential property,

(c) the relevant consideration (see section 55) for the transaction (other than any consisting of rent) is more than £125,000 but not more than £250,000,

(d) the person (within the meaning of the section concerned), or (if more than one) each of them, is a first-time buyer who intends to occupy the residential property as the person's only or main residence, and

(e) (subject to subsection (3)) the transaction is not one of a number of linked transactions.

(2) In subsection (1)-

’first-time buyer’, and

’relevant acquisition of a major interest in land’,

have the same meaning as in section 57AA.

(3) Subsection (4) of section 57AA applies for the purposes of this section.’

(4) In section 110 (approval of regulations under general power), insert at the end-

’(6) This section does not apply to regulations containing only provision varying section 57AA or 73CA, or paragraph 15 of Schedule 9, which does not increase any person's liability to tax.’

(5) In Schedule 9 (right to buy, shared ownership leases etc), insert at the end-

’First-time buyers

15(1) This paragraph applies where-

(a) a lease is granted as mentioned in sub-paragraph (1)(a) of paragraph 2 and the conditions in sub-paragraph (2) of that paragraph are met but no election is made for tax to be charged in accordance with that paragraph,

(b) a lease is granted as mentioned in sub-paragraph (1)(a) of paragraph 4 and the conditions in sub-paragraph (2) of that paragraph are met but no election is made for tax to be charged in accordance with that paragraph,

(c) paragraph 4A applies in relation to the acquisition of an interest (but the acquisition is not exempt from charge by virtue of sub-paragraph (2) of that paragraph),

(d) a shared ownership trust is declared but no election is made for tax to be charged in accordance with paragraph 9, or

(e) an equity-acquisition payment is made under a shared ownership trust (but the equity-acquisition payment, and the consequential increase in the purchaser's beneficial interest, are not exempt from charge by virtue of paragraph 10).

(2) Neither section 57AA nor section 73CA applies in relation to-

(a) the acquisition of the lease,

(b) the acquisition of the interest,

(c) the declaration of the shared ownership trust, or

(d) the equity-acquisition payment and the consequential increase in the purchaser's beneficial interest.’

(6) The amendments made by this section have effect in relation to...

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