Scottish Finance Secretary, Derek Mackay, has delivered the latest Draft Scottish Budget.
The key areas in relation to taxation can be summarised as follows:
Land and Buildings Transaction Tax
There were no changes made to the rates applicable to the acquisition of residential property situated in Scotland.
We did see a change announced in relation to the purchase of non-residential property. With effect from 25th January 2019, it is proposed that the rates will be amended as follows:
In addition to this, the Additional Dwelling Supplement, which applies to the purchase of “additional” property (as defined) will increase from 3% to 4% with effect from 25th January 2019.
Scottish Rate of Income Tax
There will be no changes to the rates applied to relevant income for these purposes.
The Finance Secretary has chosen not to pass on all of the rate band increases announced in the recent Westminster Budget (limiting the lower two bands to index-linked increases) and will freeze the higher rate threshold at the 2018/19 level of £43,430. From 6th April 2019, the rates and bands applicable in respect of the Scottish Rate of Income Tax (and the 2018/19 comparative position) are as follows:
*Assumes individuals are in receipt of the Standard UK Personal Allowance.
**Those earning more than £100,000 will see their Personal Allowance reduced by £1 for every £2 earned over £100,000.
Based on figures provided by the Scottish Government, the differential in rate bands has a meaningful impact on take home pay at around £45,000 per annum. The detail can be found here.