Archive for December, 2015

Stamp duty land tax change for second home buyers

Thursday, December 3rd, 2015

Individuals, who are considering the purchase of a second home, or a buy-to-let property, would be advised to complete their purchase before 1 April 2016. From this date new rates of stamp duty land tax (SDLT) will apply.


In his autumn statement, George Osborne announced the following change:


“Higher rates of Stamp Duty Land Tax (SDLT) will be charged on purchases of additional residential properties, such as buy to let properties and second homes, with effect from 1 April 2016. The higher rates will be 3 percentage points above the current SDLT rates. The government will use some of the additional tax collected to provide £60 million for communities in England where the impact of second homes is particularly acute. The tax receipts will help towards doubling the affordable housing budget. This will help first time buyers.”


Further clarification from the Treasury seems to indicate that these changes will include a new 3% band of SDLT on property purchased in excess of £40,000 up to £125,000.


The higher rates will not apply to purchases of caravans, mobile homes or houseboats, or to corporates or funds making significant investments in residential property given the role of this investment in supporting the government’s housing agenda.

Reduction in bank deposit protection

Tuesday, December 1st, 2015

From January 2016 the Financial Services Compensation Scheme (FSCS) is changing. Savers have one month left to adjust their bank deposits to the new limits. Here’s the updated information posted to the FSCS website posted 5 July 2015:

 “Savers are getting a new deposit guarantee limit from the New Year.

The current £85,000 level of protection continues until 31 December 2015. So there’s no immediate change for consumers. That means people with more than the new limit have six months to spread their money around to keep within it.

The new limit will be £75,000, which will protect more than 95% of all savers. The overwhelming majority of people have £50,000 or less in savings.

The change comes under the European Union Deposit Guarantee Schemes Directive. It fixes a harmonised limit of €100,000 (or the equivalent) across Europe. The new UK limit is set today. 

There’s also other good news for some consumers with higher balances. People with some types of temporary high balances will have FSCS protection up to £1m for up to six months. Things like the proceeds from a house sale qualify for the new protection limit.

Large companies and small local authorities (such as parish councils) will also benefit from FSCS protection from today. FSCS will cover them up to the new limit of £75,000.”

 Other changes include:

From 3 July 2015, depositors with temporary high balances will be covered up to £1 million for six months from the date on which the money is transferred into their account, or the date on which the depositor becomes entitled to the amount, whichever is later. This is to ensure that depositors are protected when they deposit funds over the limit as a result of specified events, including following a house sale or funds received from a ‘life event’ such as a divorce settlement or inheritance, for a period of time until they have had sufficient time to spread the risk between institutions to appropriately protect these funds.

For insurance policyholders, the Prudential Regulation Authority has changed the insurance limits for FSCS compensation to increase protection for policyholders in the event of an insurer failing. This increases the limit to 100% of cover for all long term policies, for professional indemnity insurance and claims arising from death or incapacity. This reflects the potential for significant adverse consequences to policyholders, and the wider financial system, of cover being disrupted. The limits for all other types of insurance remain the same.

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