Chancellor George Osborne was on his feet for just over an hour presenting a tax neutral Budget aimed at providing economic growth and fairness.
Unsurprisingly, he took the opportunity to let rip about the state of the economy he inherited from the outgoing Labour government.
No one really expected any real financial surprises, because the government has little or no room for manoeuvre while negotiating an almost overwhelming fiscal deficit.
Most student landlords – along with other taxpayers – will feel the main effects of tightening their economic belts in April when pre-announced tax changes take effect.
Here's a quick guide of what to expect in the coming tax year:
Income tax
The tax-free income tax personal allowance increases to £7,475 on April 6, 2012 and goes up by £630 to £8,015 on April 6, 2012.
For the next tax year, starting April 6, student landlords will pay income tax at the following rates:
Gross earnings
Tax rate
First £2,560 after personal allowance
10%
£2,561 – £35,000
20%
£35,001 - £150,000
40%
£150,001+
50%
The 40% higher rate tax coding cuts in when gross income from all sources for the year passes the tax-free income tax coding plus the two lower rate bands of tax.
So, a landlord with a maximum tax coding of 747L will pay 40% tax on gross earnings over £42,475 (£7,475 + £35,000).
The Chancellor views the 50% income tax rate as 'temporary', but has not indicated a date when the rate will stop.
Motoring expenses
Landlords claiming mileage costs at the approved rate from April 6 can charge at 45p per mile instead of 40p for the first 10,000 miles and 25p thereafter.
Corporation tax
Corporation Tax paid by property companies will fall by the pre-announced rate of 1% to 20% from April 1 for companies with profits of up to £1.5 million a year.
Stamp duty
Tax for high value properties is under long-term review – with no indication of what a high value property may be or what taxes are involved. This is likely to cover £1 million plus properties, though.
The big change is a switch from charging stamp duty on the total value of a portfolio purchase to an average value subject to a minimum rate of 1% per property.
Disadvantaged Area Relief will be scrapped after 2012.
Furnished holiday lets
No change to previous announcements that bring in new rules from April 6.
The main change here is capital gains tax - Entrepreneur Relief applies to furnished holiday lets – the lifetime limit rises from £5 million to £10 million in the Budget.
Capital Gains Tax
Annual exempt amount rises to £10,600.
Capital allowances
Flat conversion relief is due for scrapping after 2012.
Inheritance Tax
Thresholds frozen until 2015.
