Highlights of the 2011 budget from the developer and property perspective are as follows:-
- Extension to the First Buy Scheme, the Government is to provide loans, jointly with house builders, to first time buyers to help with deposits. See Michael Stark's blog for more details.
- Reforms are proposed to encourage sustainable developments, there will be a presumption in favour of applications of this kind.
- National targets imposed on brown field sites are to be relaxed.
- Consultation will begin on whether to make it easier to convert commercial premises into residential property.
- The Government will speed up the process for sale of publicly owned property, particularly surplus military land.
- Auctions of planning permissions on land will be trialled for the first time, starting with publicly owned property.
- The planning system is to be speeded up, there will be a new 12 month limit for the processing of planning applications, inclusive of any appeals process.
No doubt more details will be published in due course and we will then be able to assess the full impact on the property market and the development industry. In the meantime, if you would like any further information regarding commercial property or property development, please contact our expert team at property@nockolds.co.uk
Alison Hare (profile) 
Thursday 24th March 2011
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Sarah Miles explains that in the budget 2011 the main rate of Corporation Tax, applicable to larger companies, has been reduced by 2% to 26% rather than the planned reduction of 1%. Further cuts over the next three years will see Corporation Tax reaching 23% by 1 April 2014. Britain currently has the sixth highest rate of Corporation Tax in Europe. However by 1 April 2014 when the rate has reached 23% it will have the lowest rate of Corporation Tax in the G7 and will be 16% lower than in America. The aim of these changes is to make trading in the UK via a limited company more attractive.
Cuts in capital allowances will partly fund these measures, mainly affecting smaller companies. The changes to the allowances regime will however be delayed for one year. Furthermore the rate of Corporation Tax for small companies (those with an annual turnover of less than £300k) which was set to increase from 21% to 22% will be cut to 20% from 1 April. Overall the additional reduction in the rate of Corporation Tax and the planned further cuts must be good news for businesses and will hopefully encourage business growth and investment.
If you would like to talk to one of our business and commercial law experts, please contact business@nockolds.co.uk
Sarah Miles (profile) 
Thursday 24th March 2011
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The New First Time Buyers Scheme
A buoyant property market is dependent upon there being a sufficient number of first time buyers. Because many lenders require them to have a deposit of up to 25% of the value of the property first time, buyers have been in short supply since the credit crunch. In an attempt to kick start the housing market the Coalition Government announced a First Buy scheme in this year's budget. This is joint Government and House Builders scheme that would see first time buyers eligible for an equity loan of 20% of the value of a new property. 10% of the equity would be provided by the Government and 10% by the House Builder and a further 5% of the property’s value would need to be provided by way of a deposit by the first time buyer. The equity loan would be interest free for 5 years and would have to be repaid when the house was sold.
It is felt that the scheme is quite modest because it will only apply to first time buyers wishing to buy new homes, only 10,000 first time buyers will be eligible and the scheme will only be open for one year.
For more details or to discuss how Nockolds can help you move home, please contact movinghome@nockolds.co.uk
Michael Stark (profile) 
Thursday 24th March 2011
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Pot Holes – too little too late?
The Government yesterday announced that they are providing an extra £100 million funding for Local Authorities in England to repair potholes, in addition to the extra £100 million funding provided in February. Councils must publish, on their websites, how the money has been spent by no later than 30 September 2011. The money will then be allocated to the 149 councils in England based on the number and condition of their roads.
English councils filled in over 200 million potholes last year at an average cost of £314 per fill a total cost of £628 million. It is, however estimated that there is a backlog of £9.5 billion in road repairs.
More money is needed to resolve this perennial problem and although we may have had a hard winter last year this cannot be the sole explanation for this huge backlog. As a direct consequence of England’s pothole filled roads Councils are paying over £50 million in compensation every year and the cost to motorists is over £320 million.
£100 Million may sound a lot of money especially when it is added to the existing budgets and the £100 million provided in February but it is only an average of £671,000 per authority. Surrey County Council (for example) will need to spend £400 million to repair their roads which is important as these are the roads over which Olympic Cyclists will be riding in just over a year’s time.
Hertfordshire County Council had 746 claims from motorists in the first 3 months of 2010 whilst Essex County Council had 734 claims in the same period. The majority of these claims were rejected leaving the motorist to consider whether to resort to the litigation process.
Whilst damage to your car can be a costly inconvenience it is the Personal Injury Claims to motorists and cyclists caused by potholes which is of greater concern. There are too many accidents caused by the state of the roads in England. We have helped Claimants who have suffered various injuries from scarring to broken bones but some cyclists have not been so lucky. On 24 March last year Captain Jonathan Allen was cycling along a road when he swerved to avoid a pothole and was hit by a lorry suffering multiple injuries and being pronounced dead at the scene. Whilst Local Authorities will no doubt welcome this extra money surely more funding need to be provided to avoid similar accidents.
If you would like further information on this issue or to discuss a claim, then please contact Ivan on imoody@nockolds.co.uk
Ivan Moody (profile) 
Thursday 24th March 2011
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George Osborne's 2011 Budget budget announced a reduced rate of inheritance tax for some, with a connected benefit for charities. A good thing? Well, what's not to like? It's better for you and better for charity. But how do you make sure your estate is eligible for the lower rate? That is a trickier question to answer.
The budget says (and this is the translated version!) that if you leave a gift to to charity in your Will (after taking off IHT exemptions and reliefs and the nil rate band) then the rest of your estate will be taxed at 36% rather than the usual 40%.
This is a somewhat confusing and unclear statement which we are promised will be clarified by the government after consultation.
However, it will not come into force until April 2012 at the earliest. And, of course, anything you leave to charity is completely exempt from IHT in any event. (As is any gift to a surviving spouse or civil partner). The more important consideration in the short term may be to make sure that you have a Will in place and that you remember the charity of your choice in that Will.
If you need advice on this or any other inheritance issue, please contact Nockolds Wills team at wills@nockolds.co.uk .
Example calculations for a single person leaving a £1,000,000 estate:
Existing rules
Estate of £1,000,000
Nil rate band of £325,000, leaving £675,000 to be taxed
Gift of £67,500 to your local hospice (ie 10% of the net estate)
Leaves £607,500 to be taxed at 40%
Giving an IHT bill of £243,000 and leaving £364,500 plus the nil rate band (total of £568,000) for your other beneficiaries.
But, if you make no such gift to charity, the the figures would be:
Estate of £1,000,000
Nil rate band of £325,000, leaving £675,000 to be taxed at 40%
Giving an IHT bill of £270,000 and leaving £405,000 plus the nil rate band (total of £730,000) for your other beneficiaries.
Potential new rules:
Estate of £1,000,000
Nil rate band of £325,000, leaving £675,000 to be taxed
Gifts of £67,500 to your local hospice (ie 10% of the net estate)
Leaves £607,500 to be taxed at 36%
Giving an IHT bill of £218,700 and leaving £388,800 plus the nil rate band (total of £607,500) for your other beneficiaries.
Useful articles:
Guardian http://www.guardian.co.uk/uk/2011/mar/23/budget-2011-inheritance-tax-cut
Telegraph: http://www.telegraph.co.uk/finance/budget/8402261/Change-in-Inheritance-Tax-laws-encourages-charitable-giving.html
Tax info taken from HMRC website:
"3.40 Inheritance tax – reduced rate — The Government has announced that a reduced rate of inheritance tax (IHT) will apply where 10 per cent or more of a deceased’s net estate (after deducting IHT exemptions, reliefs and the nil rate band) is left to charity. In those cases the current 40 per cent rate will be reduced to 36 per cent. The new rate will apply where death occurs on or after 6 April 2012. The Government will be consulting on the detailed implementation of this measure and will issue a consultation document before the summer. "
Janette Wand (profile) 
Thursday 24th March 2011
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