Stamp tax – Arab Center Sat, 18 Sep 2021 01:31:02 +0000 en-US hourly 1 Stamp tax – Arab Center 32 32 Section 80C Deductions I Avoid These Mistakes By Investing To Save Tax Under Section 80C Sat, 18 Sep 2021 01:31:02 +0000

Avoid These Mistakes By Investing To Save Tax Under Section 80C | Photo credit: BCCL

Section 80C of the Income Tax Act, 1961 is a powerful weapon in the hands of taxpayers because it helps reduce taxable income. Subsections such as 80CCD, 80CCD (1), 80CCD (1b) and 80CCD (2) allow taxpayers to reduce their tax burden through eligible investments and expenses.

In order to use it wisely, taxpayers can plan their investments on a multitude of products such as the public provident fund (PPF), the national pension system (NPS), the national savings certificate (NSC), the repayment of the mortgage, etc. at Rs 1.5 lakh each year.

This is particularly beneficial for the middle class as these deductions are only available for Individuals and Hindu United Families (HUFs) and not for businesses, partnership companies and LLPs.

However, none of these deductions are available under article 115BAC of the recent 2020 finance law – or the new tax regime. Those who opted for the old tax regime for any fiscal year should take note of the following points as poor planning can make you ineligible for deductions.

Investment plans purchased under the name of which

The deduction is only available in respect of the policy taken out in the name of the taxpayer or in the name of his spouse or children. In the case of a HUF, the deduction is available for a policy taken out in the name of one of the members of the HUF. No deduction is available with respect to the premium paid under a policy written on behalf of any other person, including parents.

Blocking period: Certain schemes such as ELSS, PPF and term deposits, eligible for deduction under Article 80C, have a blocking period. For example, the lock-in period for the ELSS scheme is 3 years and the PPF is 15 years.

“If the taxpayer violates the blocking period restrictions, the income will be treated as the taxpayer’s income for that fiscal year and will be taxable. Now, taxpayers will have a similar situation with long-term investments like the PPF, which has a 15-year lock-in period to qualify under Section 80C. Thus, taxpayers are advised to choose investments that help them achieve their financial goals. In addition, the taxation of returns on investments and the taxation of the amount received at maturity are the two factors that every taxpayer should check before choosing an investment program, ”says Amit Gupta, MD, SAG Infotech.

Limit of the amount of the deduction from the insured capital

According to the Income Tax Department, the deduction is limited to 10% of the sum insured for policies issued after April 1, 2012.

“It is a common misconception that the full amount of the premium is deductible under section 80C. However, it should be noted that for policies taken out from 04/01/2012, only the premium paid up to 10% of the sum insured may be claimed as a deduction. In addition, the premium paid for yourself, your spouse or your children is only eligible as a deduction. The premium paid for the parents cannot be claimed. as a deduction under section 80C, ”explains Sundara Rajan TK, partner at DVS Advisors LLP.

Request for deduction for repayment of private loan

It has been observed that taxpayers try to claim a deduction on the repayment of any type of mortgage loan under section 80C, but it should be understood that the main component of private loans i.e. loans taken out from friends and relatives) are not covered by section 80C, Gupta added.

If a taxpayer wishes to claim a deduction for the main component of the home loan, he must ensure that the loan must be provided by the specified entities. Loans granted by a bank, a cooperative bank, the National Housing Bank, the Life Insurance Company, etc. fall under it.

Registration and stamp duty deduction

Gupta further adds that expenses such as stamp duty, registration fees and certain other expenses directly related to the transfer of ownership of a dwelling house are only allowed under section 80C. For commercial properties, these expenses cannot be deducted under section 80C. Thus, taxpayers should wisely choose the type of property to claim the Section 80C deduction. These deductions are subject to the condition that the property is held for 5 years from the end of the fiscal year in which possession is obtained. In the event that home ownership is transferred within 5 years, the deduction claimed earlier will be considered income in the year of the transfer, Rajan explained.

Error requesting tuition deduction

Only tuition fees for schools and colleges are allowed for deductions and not book fees, development fees, library fees etc.

“The deduction will be available for fees paid for full-time education in India for up to two children, and only the tuition portion of the full fees will be eligible for the deduction. So before you provide any data, be sure to do some math, ”Gupta said.

Endowment insurance plans

Savvy financial planners advise their clients to keep insurance and investment plans separate and endowment insurance. Group insurance plans essentially provide life coverage to buyers and provide a maturity payment in case the buyer outlives the term of the policy.

“Life insurance plans are life insurance plans that are good for saving taxes and essential investments. However, investing a large chunk of your hard earned money in it will not give you good returns. So if you want to save more, invest in a term plan, which also qualifies for a tax deduction under section 80C, ”Gupta explains.

It is equally important to know whether or not the investment you choose is suitable for your tax planning.

“When choosing investment options to claim a Section 80C deduction, it is equally important to understand the income tax implications of those investments. Specific income such as life insurance policies, provident funds, national pension scheme, Sukanya Samriddhi scheme, etc. are tax exempt, while income from term deposits, NABARD bonds, etc.

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How to assess your home for property tax Fri, 17 Sep 2021 16:46:38 +0000

Revenue has launched a new online tool to help homeowners determine the value of their property, ahead of the next local property tax assessment date of November 1.

Under changes announced by the government in June, all properties will need to be reassessed every four years.

The amount of local property tax you pay will depend on the value of your property and what category it belongs to.

Since the tax is self-assessed, homeowners are responsible for calculating the value of their property.

To achieve this, Revenue has launched an interactive assessment tool, available in the “online services” section of the Revenue website.

How does this new tool work?

The revenues have divided the country into 18,000 small areas, which contain between 50 and 200 properties.

Homeowners can enter their airline code or address to find their small area and see what the average property value is in the area and in which valuation range falls the most.

Revenue, said the tool should only be used as a guide, and urged homeowners to also use other sources such as the property price register and Central Bureau of Statistics figures during the process. ‘Evaluation.

“What we’re trying to do is provide valuation advice,” said Keith Walsh, head of statistics and economic research at Revenue.

Mr Walsh pointed out that Revenue does not know the price of every property in the country, but does know the values ​​that were returned in 2013 – the last time property appraisals were held for the LPT.

“What we have done is a big data exercise to take the valuations that were returned in 2013 and move them forward to an approximate price of 2021,” he said.

“We did this with data from our own stamp duty systems, data from the Central Bureau of Statistics on real estate price trends over the period, and then we pulled other sources as well.”

How many valuation bands are there?

In total, there are 20 valuation ranges, which the Government has widened since 2013.

According to Revenue, the average property value falls in Band 2.

This is for properties valued between € 200,000 and € 262,500.

Owners of this tape can expect a bill of € 225.

Will my LPT bill go up?

Revenue said less than 10% of homeowners will see a change in their bills as a result of the reassessment.

Mr Walsh said that while the value of most properties has increased since 2013, the majority of homeowners will stay in the same valuation range and pay the same amount on their annual bill.

What has changed since the last LPT reviews?

The last appraisals under the Local Property Tax were carried out in 2013.

New houses built since then have been exempt from the royalty.

However, the changes announced by the government this summer will bring about 100,000 new homes built over the past eight years into the property tax net.

What happens if I don’t pay?

Revenue said the local property tax compliance rate is 97% – and it expects it to remain unchanged.

Katie Clair, a senior officer with Revenue’s local property taxes branch, said they would continue to run their compliance campaign.

“If you don’t submit your LPT return and you don’t assess your property, we will use the assessment tool to estimate your LPT fees – and it is these fees that will be associated with the property.

If you don’t comply, Ms Clair said the tax administration has a “wide range” of options to ensure liability is met.

“This could include the cancellation of the tax clearance, it could include a mandatory reduction at source or the offsetting of liability with available credits,” she said.

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ET Wealth Wisdom Ep 133: Can You Afford To Take A Home Loan? Fri, 17 Sep 2021 04:28:00 +0000


Hello everyone and welcome to the ET Wealth Wisdom podcast
I am Tania Jaleel
For many, buying a home means stretching finances to the max.
In the latest edition of ET Wealth, Sanket Dhanorkar wrote a four-point checklist to use before taking on the financial burden of a home loan.
Use this checklist to make sure your home loan doesn’t end in a noose around your neck
Emergency fund in place?
Before even starting to calculate the numbers, you need to make sure that your foundation is in good shape.
In addition to creating an emergency financial reserve, you need to cover your family with a temporary plan and medical insurance.
The emergency corpus should be large enough to cover all of your expenses for the next 12 months. This should also take into account the new EMI commitments on mortgage loans.
This is to provide an immediate financial cushion in the event of loss of income due to job loss, accident or prolonged illness.
Having this stamp when paying off a large mortgage has proven to be essential over the past 18 months.
Deposit too high?
Banks require borrowers to pay 20% of the value of the property up front before agreeing to sanction a loan for the remaining amount.
However, you can put a higher amount if you want.
For a property priced at Rs 90 lakh, the maximum loan allowed will be Rs 72 lakh, which means you pay Rs 18 lakh as a down payment.
Moreover, you also have to pay a few lakhs for stamp duty and GST, the latter only if you go for a property under construction.
Together, this expense is a princely sum for the most part.
Even so, financial advisers generally suggest going for the maximum possible down payment.
A smaller loan component not only invites lower interest rates and reduces the burden of EMI, it also reduces total interest expense and allows for faster repayment.
Still, borrowers should not dump all of the accumulated savings into the down payment.
When you consider how much savings you have for your down payment, don’t forget your retirement and other essential life goals.
Do not withdraw the money set aside for these purposes.
Also consider expenses for renovations or furnishing your new home.
Then, after having provided for the emergency corpus cushion, what remains can be paid into the deposit.
Plus, a large down payment will strain your cash flow, so plan accordingly.
How much NDE will he eat away at?
Typically, a bank assumes that around 50% of your monthly disposable income is available for repayment.
No bank will grant a loan beyond this threshold.
This includes your current EMI engagements, if applicable.
But the lender’s internal EMI cap may not be realistic for everyone.
For example, if you earn Rs 1 lakh each month and incur expenses of Rs 60,000, then a Rs 40,000 EMI is simply unaffordable.
You would live day to day in such a scenario.
If you are buying a property under construction, you will likely be paying rent with your EMI.
Make sure you can afford it even if the bank is willing to give you a large loan.
Stretching your budget is okay up to a point, as your income will increase, but IMEs will not. But don’t go too far.
A good way to approach this problem is to assume that the NDE becomes a reality the very next day.
Some borrowers are simply sold on the tax benefits that a home loan allows under income tax rules.
These deductions, which effectively reduce the cost of the loan over its lifetime, often lead borrowers to make heavy EMI commitments.
But these benefits only accumulate up to a certain threshold.
When repaying high-interest home loans, the tax benefits are diluted.
An individual is entitled to deductions of up to Rs 2 lakh per year for interest payments on home loans.
If you pay off a 20 year home loan of Rs 75 lakh at 7% interest, the amount of interest will exceed Rs 2 lakh for several years.
Even if you go for a joint home loan with spouse where both husband and wife can claim a deduction of Rs 2 lakh each per year, the deductions are much lower than the actual interest for the first years.
So do not extend the EMI mortgage for the sole tax benefits.
Compromised goals?
For many, there is no doubt that taking home loan EMIs will temporarily put other financial goals on the back burner.
You can go several years without saving for your own retirement or your children’s college education.
But that doesn’t mean you have to compromise on other goals.
If you can’t plan for contributions to other essential life goals, try to prioritize those goals.
Pursue them selectively, like non-negotiable goals like higher education.
Alternatively, you can reduce the contributions for the time being.
In a few years, as your income grows to allow you to breathe, seriously start contributing to other goals.
With that, that will be all for this week
Check back next week for more wealth wisdom

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Five Covid Support Programs Ending This Month – And Last Chance For SEISS Grant Thu, 16 Sep 2021 17:50:17 +0000

Households have a little less than two weeks left to take advantage of Covid support programs before closing permanently in England and Wales.

This includes the fifth Coronavirus grant for the self-employed and the reduction in stamp duties, although some benefits, such as the holiday and the universal credit increase of £ 20 per week are now closed to new applicants.

The measures are part of a broader government plan to bring the country back to normal and despite the increase in the number of Covids, the Prime Minister and Chancellor Rishi Sunak have both confirmed that support will neither be restored. nor extended.

Before the last cuts, here’s what you need to know.

1. Closure of the fifth SEISS Covid grant

Independent Britons who were lucky enough to take advantage of the government’s Covid grants will come to an end next month, which means this is your last chance to get up to £ 7,500.

The fifth and final grant ends September 30, so anyone who is eligible should apply as soon as possible if they haven’t already or are at risk of missing out.

The government has said the program will end in accordance with the leave – meaning there will be no more grants after it, but anyone still struggling can find additional support.

If your income has gone down, it is worth checking to see if you can qualify for benefits to supplement low income – many of those who apply for universal credit are also working.

But be aware that the amount you get may be affected by something called the minimum income threshold.

You can use our handy benefit calculator to determine what you may be entitled to.

2. Universal credit increase of £ 20 ends next month

Chancellor firmly determined to end increase in late September – despite 6 million people claiming universal credit


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Despite calls for the support to be made permanent, Rishi Sunak has confirmed that the £ 20 increase – the equivalent of £ 80 per month – will be phased out from 6 October.

Universal credit payments are all based on assessment periods – which will determine when the reduction goes into effect for you.

For many, that means September will be the last month they see their universal credit paid off at existing levels.

If your evaluation period ends on or after October 6, you will receive the new lower universal credit amount.

The DWP says it will update claimants’ statements and log messages “with clarification that [the uplift] will no longer be included in their standard allowance “in the coming weeks.

To view your journal and universal credit statement, you must log into your online account.

Should the uprising be permanent? Let us know in the comments below

DWP has started issuing notice periods

Charity Turn2Us previously warned that removing the increase could see 500,000 people “trapped in poverty overnight” and thousands forced into food banks.

Resolution Foundation CEO Torsten Bell said: “It is a very bad idea to remove the temporary increase in universal credit by the end of September.

“This is happening exactly when unemployment is expected to rise.

“It takes 7% of the income of Britain’s poorest families in the second half of this year.

“The Chancellor shouldn’t be doing this. It will also bring the base level of benefits down to levels we haven’t seen since the early 1990s.”

When the cuts take effect, applicants will lose £ 20 per week from their benefit payments.

The full scope of how this will affect you will be added to your online statement.

To give an estimate, here is what you might receive from October 1 to the end of the tax year.

  • Single and under 25: increased flat-rate compensation increased from £ 344 to £ 257.33
  • Single and 25 years of age or over: Standard allowance with supplement will increase from £ 411.51 to £ 324.84
  • Joint applicants both under the age of 25: Standard allowance with supplement will increase from £ 490.60 to £ 403.93
  • Joint applicants one or both of whom are 25 years of age or older: The standard supplement with supplement will be increased from £ 596.58 to £ 509.91 in total.

3. The leave ends

The leave will not be extended beyond September, the Chancellor confirmed, marking what will be one of the biggest cuts for more than a million workers.

Currently the government pays 60% of wages up to £ 1,875, employers pay 20%, plus national insurance and pension contributions.

The employer must then supplement up to 80% of his salary – up to a maximum of £ 2,187.50.

The leave scheme was of some sort a saving grace for many employers as foreclosure restrictions were in place.

However, no further extension means employers will have to make internal arrangements for their staff if they cannot return to work.

If you are concerned that your job may be at risk, check out our guide to termination rights on leave, here.

4. The stamp duty will be fully restored

The stamp duty holiday will end at the end of September after being introduced at the height of the pandemic to keep the real estate market stimulated.

Initially, the tax break applied to homes in England and Northern Ireland worth up to £ 500,000, but that ended on July 1.

Buyers can still benefit from no stamp duty on the first £ 250,000 of any primary residential property in England and Northern Ireland until September 30.

However, the full tax will be reintroduced in England and Northern Ireland on October 1.

Under the normal rate, a stamp duty is applied to houses valued over £ 125,000. Anything between £ 125,000 and £ 250,000 is subject to a 2% tax, followed by 9% up to £ 925,000 and 10% up to £ 1.5million.

If you are a first-time buyer, you don’t pay this tax on homes worth up to £ 125,000 or £ 300,000. Any excess between £ 300,000 and £ 500,000 is taxed at 5%.

Stamp duty is a tax levied when you buy a property – although it is referred to as ‘land and property transaction tax’ in Scotland and ‘land transaction tax’ in Wales.

5. Covid Local Support Grant

Families in England struggling with the costs of food and utilities have just two weeks left to get additional help from the government.

Indeed, the Covid local support grant will end on September 30.

This is a £ 429million grant the government has given to councils to support families in need during the Covid pandemic.

The councils used the money to help residents pay their utility bills and buy food.

Support is provided by central government, but it will be up to local councils to decide who will receive the grants.

This means that each local authority has different criteria for applications and eligibility – they also received different amounts of money.

You should contact your town hall directly to see what support it can offer you – find your town hall online here.

Generally, at least 80% of the total funding is allocated to households in difficulty with children.

The food element could take the form of cash, food vouchers or boxes, with support to be decided by the board.

Learn more about how to claim support, here.

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Australia’s climate failures are costing its economy dearly – and Scott Morrison’s government is blamed | Greg Jericho Wed, 15 Sep 2021 02:31:00 +0000

The latest OECD economic survey of Australia details an economy that has weathered the Covid storm well, and yet while the Morrison government will appreciate such rhetoric, it will not like the advice that comes with it – recommendations to improve our low productivity growth, inequalities and massively reduce our emissions.

The OECD only surveys a country every few years. The latest, released overnight, is the first for Australia since December 2018.

In 2018, global pandemics were just the stuff of the movies; The report therefore focused on keeping growth at around 3%. At the time, the OECD noted of Australia, “life is good, with high levels of well-being”.

This time, the opening is rather less bubbling.

Still, the OECD praises our Covid response, noting that “well-coordinated policies between different levels of government have sought to suppress the transmission of Covid-19” and that the “economic downturn in 2020 has been less significant than in the majority of other OECD countries ”:

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The report’s authors note that Australia had one of the largest and most targeted stimulus packages for fiscal year 2019-2020:

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But he also notes that the latest epidemics and closures “have a significant negative impact on economic activity.”

The OECD believes that the Delta strain also means that the next economic rebound “could be more gradual than in previous episodes, given that it will occur in an environment of higher community transmission of Covid-19”.

And while the OECD still prefers a budget surplus to deficit, it notes that the current low interest rates mean that “the government could run primary budget deficits in the years to come and still put the gross public debt ratio down. on a downward trajectory ”.

But the OECD survey not only summarizes the current situation, it also provides recommendations – some of which will not be desired by the government.

The OECD has long supported increasing taxes through the GST over personal and corporate income taxes. He notes that our TPS has a lower rate and many more exemptions than most OECD countries and suggests that both should be changed:

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That won’t happen anytime soon, of course – unless Scott Morrison decides he really wants to lose the next election.

The OECD also suggests that the time has come to review our monetary policy framework. He suggests a broad review that potentially includes “a review of the central bank’s mandate, policy tools, public communication methods, recruitment processes and internal structures”.

While this can be politically burdensome, it is more acceptable to the government than the other OECD recommendation that fiscal policy should be much more transparent by giving the Parliamentary Budget Office the power to “assess and monitor regularly the budgetary strategy ”.

Such a role would be more akin to that of the Congressional Budget Office, and indeed is something that I have long advocated, but would see the government’s own policy come under scrutiny – something it will not accept. .

The report also argues for a further increase in unemployment benefits, noting that “the income shock resulting from falling unemployment in Australia is much larger than in other countries and minimum income supports remain well in place. below the relative poverty line ”:

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And as in 2018, the report addresses the persistent problem of low productivity growth that has been in place since 2013:

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Among the policies that OCED recommends to improve productivity are the introduction of an inheritance tax, the reduction of the capital gains tax abatement and the replacement of the stamp duty by a property tax.

While Josh Frydenberg has praised states like New South Wales for passing a property tax, there is no way the government will raise taxes on retirees and property investors.

Nor is it likely to push for the implementation of other productivity-boosting recommendations such as road user charges (another long-favored OECD policy) or a resource rent tax (yes, a “mining tax”).

But where the report is most uncomfortable for the Morrison government is when it comes to climate change.

Rather than swallowing the government’s line on meeting and exceeding its emissions target, the report notes that “faster progress in reducing carbon emissions is needed”:

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The report also notes that Australia is “uniquely positioned to benefit economically from global decarbonization due to a large (and windy) landmass, high solar radiation, [and] abundant access to the ocean ”.

Unfortunately, the report found that “there has been a downward trend in environmental innovation over the past decade and stronger incentives for innovation and the adoption of new low-emission technologies are emerging. required “. So much for our policy of reducing emissions through technology and not taxes.

This failure is blamed on the Morrison government.

The report argues that “a coherent and coordinated national strategy that defines clear objectives and corresponding policy parameters” to achieve net zero emission by at least 2050 “is necessary”.

Failure to do so since the end of the carbon price has meant Australia has missed out on “significant economic benefits” that “may come from a faster pace of emissions reductions.”

This again remains toxic to the Morrison government – as the Prime Minister does not have the political will or power to challenge climate change deniers in his government.

And so the Morrison government will find a lot to like about this survey of what the OECD reports for 2020, but a lot to ignore about what it recommends going forward.

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]]> 0 ALEX BRUMMER: A new tax levy takes too much money from the economy too soon Fri, 10 Sep 2021 20:50:45 +0000

ALEX BRUMMER: A new tax levy will hurt job creation and hurt business, entrepreneurship and savings – it takes too much from the economy too soon

  • In the Anglo-Saxon economic model, penalizing employment is not a solution
  • Companies can think twice before hiring people, like truck drivers, about improved wages if payroll taxes are increased
  • The ability of a faster growing economy to generate higher tax revenues – without introducing new burdens – should not be underestimated

Britain’s much-heralded Freedom Day July 19 proved just the opposite. A host of factors – such as pingemia, supply chain issues, and a slowdown in vaccine rollout – caused production in July to fall well below market expectations, growing only $ 0. 1%.

This prompted city economists to search their Excel sheets, with Goldman Sachs cutting its third-quarter forecast from 2.6% to 1.4%.

The British Covid rebound looks much less elastic than expected. The uneven recovery comes at a delicate time. Much of the Covid-19 hourglass assistance ends.

Good economy? : In terms of sustaining growth, now may not be the right time to impose a £ 12bn tax burden on labor, as Chancellor Rishi Sunak might find out

The stamp duty relief, which ignited the housing market and supported the service and construction sectors, has disappeared.

Some 1.6 million people, still on leave, are waiting to be called back to full-time work and the £ 20 a week increase for needy households on universal credit ends on 6 October. The era of pandemic subsidies is drawing to a close.

It is important for every citizen that the shadow of social care and the funding needs of the NHS are taken into account.

But in terms of sustaining growth, this may not be the right time to impose a £ 12 billion tax burden on labor.

Companies and employees may have until next April to consider the tax shock, but in the Anglo-Saxon economic model, penalizing employment is not a solution.

If work is to be made more attractive and people currently classified as economically inactive are to be reintegrated into the labor market, they are unlikely to fill out application forms if they know the government is going to take back much of the money. wages. Additionally, companies can think twice before hiring people, like truck drivers, to improved wages if the payroll tax is increased.

George W Bush’s main economic response to September 11, exactly two decades ago, was a sharp cut in US payroll taxes. It was an incentive not to fire people and to hire new staff, as the economy crumbled in terror. It was a supply side initiative that helped boost production and employment.

The new NHS and social care levy ends any pretense that the UK after Brexit aims to be Europe’s Singapore. In the pipeline is a meteoric increase in corporate taxes from 19 percent to 25 percent. This despite the fact that George Osborne’s war on corporate taxation saw his revenues increase.

In addition, the increase in the taxation of dividends, which has accompanied the new government system, may seem attractive because it seems that the richest will be the hardest hit. But it’s also a big blow to the Reddit generation, first-time stock buyers, and other economies.

Because the Social Services and NHS fix was not a formal financial statement, the underlying arithmetic and impact on public finances will not be explained until next month’s budget. What we do know is that faster-than-expected growth since the March budget and tight spending by the department has already generated a borrowing under-spending of £ 25bn.

The ability of a faster growing economy to generate higher tax revenues – without introducing new burdens – should not be underestimated. Another concern, highlighted by the Institute for Fiscal Studies, is that “creating an entirely new tax will lead to even more unnecessary complexity.” It is also an open goal for a future chancellor to raise more income on behalf of the NHS if needed.

The distributive aspects of the 1.25% levy have been widely contested on the left.

Yet an analysis from the Treasury shows that the lowest income households will be the biggest beneficiaries of the package, and the 20 percent of the highest income households will contribute 40 times more than the low income cohorts.

Regardless of how it is viewed, however, the new levy will hurt job creation and hurt business, entrepreneurship and savings. It takes too much of the economy too soon.

Space odyssey

There were moments of great honesty from Welsh Silicon Valley guru Michael Moritz at an event in London hosted by Buy Now, Pay Later Specialist Klarna (whom he chairs).

The Sequoia investor, who supported Google and Paypal among others, admitted to letting Elon Musk’s Tesla and Netflix slip through his fingers. He couldn’t really see why someone would bother with Netflix when they could go out on Blockbuster.

As for Musk’s other company, Space X.. . it’s a whole different ball of wax.

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Freeport Tax Sites – An Opportunity for Life Sciences Companies to Explore? – Remark Wed, 08 Sep 2021 00:03:12 +0000

What are free ports and why are they introduced?
Free port tax package
Tax breaks for R&D in free ports
The UK’s vision for life sciences
Life Sciences Investment Program


Boosting innovation is a key objective for the UK government and is at the center of its post-Brexit and post-covid-19 recovery strategy. Freeports are intended to support the UK’s innovation momentum. The government envisions that they will be “hotbeds of innovation” benefiting from customs and tax breaks and incentives to help boost the economy.

Encouraging innovation is often synonymous with increasing investment in research and development (R&D). Tax breaks for R&D are seen as an important incentive to encourage investment in R&D. Given the government’s goal of increasing total R&D investment to 2.4% of UK GDP by 2027 (an increase of over 40% since 2017), it might even be reasonable to assume that the Improving tax breaks for R&D would be part of any new innovation stimulation plan. tax package. Therefore, many commentators were surprised that improved tax breaks for R&D were missing from the final freeport tax package announced in October 2020, which broadly provides tax breaks within a freeport tax site for companies that acquire and develop commercial land, acquire equipment and employ individuals.

Across the life sciences industry, the availability of R&D tax breaks is often seen as vital for R&D investments by life science companies, especially start-ups which may depend on R&D tax credits as a source of funding. Growth within the sector is actively encouraged and is seen as a key innovation driver in the UK. As the UK life sciences sector invests more in R&D than any other sector, continued growth will also be essential for the government to meet its R&D investment targets.

Without improved tax breaks for R&D, it may appear that free ports offer limited investment opportunities for life science companies and will fail to spur innovation across the industry. Indeed, within the industry, enthusiasm for the designated tax breaks for free ports was initially subdued. However, on reflection, free ports can present significant opportunities for innovation and investment in the life sciences sector.

Before considering how the sector can benefit from the free port tax package, it is helpful to describe the nature of a free port, the government’s stated policy objectives for introducing them, and the enhanced tax breaks available at free ports.

What are free ports and why are they introduced?

In the budget of March 3, 2021, the Chancellor of the Exchequer announced the location of eight free ports across England, intended to become operational by the end of 2021. There is no precise definition of a “Free port”. Typically, a free port will be a designated area, typically located in and around existing ports, including airports and rail freight hubs, which benefits from favorable customs and tax rules and often reduced regulatory requirements. In the UK, free ports will be separate customs areas that will operate outside the country’s customs borders, allowing goods to be imported, processed and re-exported without incurring customs duties. Duties will be levied when goods leave the free port to enter the wider UK market.

The declared political objectives of the free ports are as follows:

  • establish national hubs for global trade and investment across the UK;
  • promote regeneration and job creation; and
  • create centers of innovation.

Free port tax package

Freeport tax breaks are not available to all businesses operating in a free port; on the contrary, they are only accessible in the designated free port fiscal sites, which will be specific locations within the free port. The legislation introducing the free port tax breaks was included in the 2021 finance law. In general, the tax breaks are as follows:

  • exemption from stamp duty for non-residential land until September 30, 2026;
  • capital deductions – an enhanced deduction for structures and buildings of 10% (instead of 3%) on eligible capital expenditures for the construction or acquisition of structures and non-residential buildings and a deduction of 100% on first year for eligible plant and machinery expenses until September 30, 2026;
  • National Insurance Employer Contribution (NIC) exemption – basically no employer NIC (usually payable at the rate of 13.8%) for new employees for three years; and
  • commercial tariff relief – up to 100% relief for five years.

By taking these reliefs collectively, they aim – over a five-year period – to encourage:

  • the purchase of land for commercial purposes;
  • territory planning ;
  • the acquisition of machinery and equipment to be used in the new developed land; and
  • hiring new employees to carry out the work.

The free port tax package appears to offer opportunities for innovation through manufacturing rather than R&D.

Tax breaks for R&D in free ports

Although no specific R&D related tax relief is introduced for free ports, existing R&D tax credits remain available for companies operating in a free port tax site and may be useful for life science companies. undertaking R&D in a free port.

Two tax breaks are currently available on certain eligible expenditure linked to R&D. When certain conditions are met, relief is available for small or medium-sized enterprises in the form of an effective deduction of 230% on eligible R&D costs. A research and development expenditure credit (RDEC) which provides a credit of 13% of eligible R&D expenditure may also be available. The RDEC “above the line” is taken into account as a commercial revenue, increasing taxable profits (or, conversely, reducing losses).

The government is currently undertaking a broad review of the R&D tax relief system (for details, please see “Review of the R&D Tax Relief System – a welcome development for the life sciences sector?”) A public consultation on possible reform paths ended in June 2021, and the results are expected to be published later this year.

The UK’s vision for life sciences

While encouraging innovation by encouraging R&D has traditionally been aligned with encouraging growth in the life sciences sector, the focus on innovation through manufacturing is in line with current UK government policy objectives. for the sector.

The government’s plans for the life sciences sector were detailed in its Life Sciences Vision report, released in July 2021, representing a ten-year strategy for development and growth in the sector (for more details, please see “UK Government’s vision for the life sciences sector – lessons learned from the covid-19 pandemic and green initiatives”). The government seeks to transform the UK into a life sciences superpower and most attractive place in Europe to start and grow a life sciences business At the heart of the vision is the emphasis on ‘cultivating a business environment’ in which life science companies are “Encouraged to manufacture on site” new innovative technologies.

The creation and development of new UK manufacturing centers across the industry is an integral part of the vision. Creating a “globally competitive environment for investment in life science manufacturing” is a primary ambition. There are currently over 2,000 life science manufacturing sites in the UK. However, the government recognizes that there has been a significant reduction over the past 25 years. In particular, production volumes have fallen by 29% since 2009, with certain technologies and products no longer being developed in the United Kingdom.

The government wants to develop manufacturing clusters across the industry and in different parts of the UK. The vision specifically cites the use of free ports as a tool to support cluster formation, indicating that the government views free ports as creating opportunities for life science companies to innovate through manufacturing.

Life Sciences Investment Program

Beyond the tax breaks available to life science companies looking to establish and develop manufacturing capabilities in a free port tax site, companies can also access vital financing through the government’s investment program. . A total of £ 1bn of new funding is being made available to the sector, which is a combination of a government investment of £ 200m through British Patient Capital, which is part of the British Business Bank owned by the government, and a pledge from Mubdala of Abu Dhabi. Investment Company, one of the world’s leading sovereign investors, will invest £ 800million in the UK life sciences sector in collaboration with British Patient Capital.


Given the current drive to encourage life science manufacturing and to develop manufacturing cluster sites, free ports and their associated tax benefits may offer significant opportunities for life science companies to explore. The availability of designated tax breaks for free ports, combined with existing tax breaks for R&D and increased access to government funding, can create a powerful incentive to establish new life science companies in tax sites for ports. franks who seek to develop and manufacture new products and technologies.

Free ports can indeed help give the desired impetus to innovation in the life sciences sector. Increased tax breaks for R&D remain an important tool to encourage investment in R&D and innovation for life science companies. Despite the introduction of free ports as a means of encouraging innovation, given recent statistics released by the Office for National Statistics indicating that the UK may struggle to meet its R&D investment targets, there is hopes the government will continue to ensure that tax breaks for R&D remain effective and continue to encourage innovation through investment in R&D.

For more information on this topic, please contact Penny simmons at Pinsent Masons by phone (+44 20 7418 8250) or by e-mail ([email protected]). The Pinsent Masons website can be accessed at

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Real estate loans | Opt for a mortgage balance transfer? Know the factors to consider Sat, 04 Sep 2021 00:44:15 +0000

Opt for a mortgage balance transfer? Know the factors to consider | Photo credit: BCCL

New Delhi: Nowadays, most lenders give home loans between 6.5% and 9% interest. These reductions have given mortgage borrowers the option of changing their outstanding loans to qualify for a lower interest rate. In an extremely competitive market, different lenders are offering different interest rates on home loans to borrowers due to many factors.

So, to ease the burden on mortgage payers, most banks have offered mortgage balance transfer, in which the borrower can reduce their existing equivalent monthly payments by transferring their outstanding loan amount from the current bank. to others. that offer lower interest rates.

In most cases, the primary goal behind choosing a home loan balance transfer is to reduce the overall interest cost on the outstanding home loan amount. The balance transfer option is especially useful for existing borrowers who initially took out the loan at a higher interest rate and are now eligible for a much lower rate due to their improved credit profiles. The lower interest rate used when exercising the Home Loan Balance Transfer (HLBT) results in a reduction in the overall interest payment on your existing home loan, without impacting your existing cash and investments.

Here are some other factors you should consider before switching to a mortgage lender:

1. Fees: Prepayment charges for the old loan, processing fees for the new loan, stamp duty charges (on the new mortgage document from the lender), legal / technical fees, etc. can add layers of additional costs that a borrower will have to incur during the mortgage balance transfer process. While it is undeniable that even a small reduction in interest rates can mean savings for the borrower, but if the additional costs outweigh the benefits of the lower interest rate, the goal of the home loan transfer is defeated. .

2. Duration of occupation: Changing loans is only beneficial if the loan term is long in order to make the risk-reward in its favor. For example, a borrower who has a loan of Rs 50.00,000 for a term of 15 years issued at 7.4% by a certain lender, gets it refinanced at 6.90%, or 50 bps less. They can save over Rs 2.5 lakh in total.

Criteria for changing lender:

Considering everything, it makes sense for a borrower to only change a home loan if there is a difference of at least 50 basis points between the new and old rates and the remaining term is at least 10 basis points. years or older. For loans with a remaining term of less than 10 years, the interest difference should be well over 50 basis points.

Simply put, the longer the remaining term of the loan, the greater the potential benefit from the interest savings. Keep in mind that if you switch to a lower mortgage rate, your IME interest component will decrease, meaning that the tax benefit eligible for the Section 24 interest deduction will also decrease.

When to change

There is no one idea that works for everyone. Ideally, calculations should be done on a case-by-case basis. Proper analysis of the cost differential and knowledge of any additional costs involved in addition to the interest rate differential is what will give a clear picture of whether or not to change.

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Stamp duty increases 148% from April to July this year in Gujarat | Ahmedabad News Tue, 31 Aug 2021 22:30:00 +0000 GANDHINAGAR: Even though cases of Covid-19 in the state have been hovering at the bare minimum for the past few weeks, economic activity is showing impressive growth. State government revenues from various sources increased by 36% during the period from April to July of this year, compared to the same period last year.
Significantly, compared to the corresponding period last year (2020), revenue from stamp duties and property registration increased by 148% during the period from April to July of this year. , reflecting a huge surge in real estate transactions since April of this year.

As of July 2020, just after the lockdown, revenue from stamp duty and registration fees was Rs 588 crore. In July of this year, revenue from stamp and registration duties hit the mark of Rs 968 crore. Taking into account the period from April to July, the revenue from stamp duty and registration in 2020 was Rs 1,234 crore. This year, the revenue from stamp duty and registration between April and July is Rs 3,061 crore.
Stamp duties and registration revenues have been so impressive that the state government earned 34% of its annual budget target of Rs 8,700 crore in the first four months of the fiscal year.
According to official state government figures, the number of property documents registered in the first four months of 2020-21 was 1.94 lakh, which rose to 4.07 lakh in the first four months of 2021-22, reflecting a whopping 110% jump in the total number of bills of sale recorded in the state.
However, the main source of state revenue – goods and services tax (GST) revenue increased only 6% in the first four months of the current fiscal year compared to the same period last year. Revenue from stamp duties and registration increased 148% in the first four months of the current fiscal year compared to the same period last year. Motor vehicle tax grew 110% in the first four months of the fiscal year compared to the corresponding period last year.
The VAT (value added tax) on petroleum products showed an 81% increase in revenue in the first four months of the current fiscal year compared to the corresponding period last year. Government revenues from the sale of alcohol (ban and excise tax) registered a 61% increase in the April-July period of this year compared to the same period last year.
Although overall government revenues from all sources showed a marginal decline in the year 2020-21 (Rs 79,793 crore) compared to the previous year 2019-20 (Rs 86,534 crore), the government is optimistic about its ability to break through the revenue target of Rs 1.08.035 crore this year. Source link

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July transactions down 61% compared to June 2021 Tue, 24 Aug 2021 09:57:29 +0000

Transaction figures released today (August 24) by HMRC show a 61% decrease in moving activity in July compared to June following the completion of the first stage of the SDLT vacation phase-down process.

From July 1 to September 30, only properties in England up to £ 250,000 are eligible for the zero rate bracket; the Welsh government reinstated the land transactions tax (LTT) for all properties in Wales from July 1, where the zero rate bracket was reduced to £ 180,000.

July figures show a provisional unadjusted estimate of 82,110 transactions, 1.8% more than in July 2020 and 61.5% less than in June 2021

The numbers also highlight the strength of the market with the second quarter 2021 numbers (429,290) the highest second quarter total since the introduction of these statistics in April 2005, and the highest quarterly total since the third quarter. quarter 2007 (442,930)

Despite the decline in the number of transactions, industry figures remain optimistic about market conditions, with indications that transaction levels will remain stable after the end of the SDLT holiday end in late September.

Last week, NAEA Propertymark released its own figures which show a ‘rebalancing’ of prices and demand with Chief Executive Officer Nathan Emerson says

“The slight rebalancing in the market this month is good news and a step in the right direction, with the supply of properties starting to increase and the number of homes sold above asking price starting to level out. Now that the stamp duty holiday is nearing its final end, we expect this trend to continue in the coming months as people and spending habits return to normal after Covid. “

Adam Forshaw, General Manager of O’Neill Patient.

“Real estate transactions were to be expected to be weaker in July, but 62% is quite a drop. That said, June was a banner month as the transfer industry worked hard to secure so many home sales before the end of the first phase of the stamp duty holiday. This has seen record months for most companies in the transfer of ownership industry.

“We still see a good level of instruction in home sales and purchases, as people are always eager to beat the final stamp duty exemption on September 30. The positive news is that we are also seeing a strong comeback in the remortgage market despite the holiday season, which we hope will continue over the next few months. “

Andy Sommerville, Director of Search Acumen, comments

“After the mad rush to beat the stamp duty property tax holiday deadline at the end of June, there would still be a drop in activity over the summer months and we have seen that is reflected in today’s numbers with transactions down nearly two-thirds in the space of a month. However, while this may provide a welcome opportunity for the transfer industry to catch its breath, we expect this to be relatively short-lived.

“The phasing out of tax incentives could lower the number of transactions from their record highs for a short time, but the market will continue to be fueled by buyers who must adapt to sustainable societal changes in the post-world world. pandemic. It is therefore likely that the number of transactions will rise again in the fall, when people return from vacation and have had a few months to assess what their working and living conditions might look like in the long term.

“Faced with the prospect of high levels of activity in the market later this year and next, it has never been more important that the real estate industry continues to push the pace of change and technological innovation. The adaptability of businesses throughout the pandemic has kept the market going despite some of the most difficult conditions we have ever seen. Sure, many will enjoy a well-deserved rest over the summer, but it’s critical that business leaders build on the positive momentum we’ve seen over the past 12 months and continue to review how new processes and technologies, like AI, and increased digitalization of data can drive future efficiencies.

Following news this weekend from the influential Resolution Foundation think tank that the impact of the SDLT vacation may have been overestimated, with other factors playing an equal, if not more, role, Sarah Coles, Personal Finance Analyst, Hargreaves Lansdown adds:

“Real estate sales fell by almost two-thirds in July, after the deadline for the stamp duty holiday expired. This demonstrates the powerful psychological impact of the tax break, which goes far beyond the actual savings that cash buyers could save. “

“The stamp duty holiday did not create demand out of nowhere. There were already crowds of people ready to buy due to the changes in the way we live and pent-up demand for the market to close in the first foreclosure. The tax break just opened an eight month window, through which this crowd of people tried to squeeze in… it meant an explosion in property sales, and the fact that there were fewer sellers than there were. buyers at a time of such massive demand, has driven prices up through the roof.

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