The 245-page Act includes legislation on changes to corporation tax rates for 2017-20 with the provision to reduce the CT rate to 18% for tax year 2020-21. It also confirms plans to revert to a £200,000 annual investment allowance, which had been planned to drop to £25,000 under the original coalition plan.

The Conservative plan to increase the nil-rate band for inheritance where a home is inherited by descendants also comes into force. This means that the ‘residential enhancement’ is applied as:

• £100,000 for the tax year 2017-18;
• £125,000 for the tax year 2018-19;
• £150,000 for the tax year 2019-20, and
• £175,000 for the tax year 2020-21 and subsequent tax years, but this is subject to subsections (6) and (7).

At the same time, the ‘taper threshold’ is set at £2m for the tax year 2017-18 and subsequent tax years.

There are also measures to legislate rules on direct recovery of debts from individual taxpayer accounts. It also sets out that ‘the Treasury may, by regulations made by statutory instrument, make consequential, incidental or supplementary provision in connection with any provision made by that schedule’.

For buy-to-let property owners, the Bill sets out the restricting deductions for finance costs related to residential property, which amends Income Tax (Trading and Other Income) Act 2005 (ITTOIA 2005).

From 2017-18 tax year, where a deduction is allowed for costs of a dwelling-related loan in calculating the profits of a property business, the amount allowed to be deducted in respect of those costs in calculating those profits for income tax purposes is 75%, reducing to 50% in 2019-20 and 25% in 2019-20.

In calculating the profits of a property business for income tax purposes for the tax year 2020-21 or any subsequent tax year, no deduction is allowed for costs of a dwelling-related loan.

Finance (No. 2) Act 2015 is available here