Alistair Darling Gives First Pre Budget Update
The new chancellor, Alistair Darling, gave his first budget update on 9 October.
Here is a brief synopsis of the main points that may be of interest to C and S Finance clients. Please contact us if you have any queries.
Personal and Employment Taxation
The Chancellor announced a major change in the capital gains tax (CGT) regime for individuals and trusts, companies are unaffected.
Taper relief for business and non business assets will disappear for assets disposed of after 6 April 2008. Indexation allowance will also be removed. All gains will be taxed at 18%.
Domicile and Residence
There are proposals to change the basis of taxation for individuals who are non domiciled or ordinary resident in the UK. The intention is that the taxpayer will not be able to claim the remittance basis of taxation after seven years of residence. There is to be a consultation period and publication of draft legislation later this year.
Income Shifting in Family Businesses
See our article Pre Budget Report - Government Plan Arctic Attack.
IHT Relief for Couples: Transfer of Nil Rate Band
It will be possible from the 9 October 2007 for spouses and civil partners to transfer their unused inheritance tax (IHT) nil rate band to the surviving spouse or partner. This will in effect give a nil rate band currently of £600.