News Item
Pre-Budget 2007 Report - Significant Developments
The Finance Bill 2008 will contain a measure which many people will feel is a just and fairer approach to Inheritance Tax.
The new legislation , which is effective immediately , shall allow for the transfer of unused 'nil' rate band on the death of a spouse or civil partner to their surviving spouse/partner.
In simple terms if a spouse does not use all or part of their 'nil' rate band this unused element can be transferred and used to reduce future IHT on the death of their survivng spouse or civil partner.
The new rule also extends to allow for inflationary increases in the 'nil' rate band which helps protect family wealth.
http://www.hmrc.gov.uk/pbr2007/pbrn16.pdf
Please follow the above link for sight of HM Revenue & Customs press release.
In a very unexpected move the Chancellor has also proposed dramatic changes to Capital Gains Tax , with effect from 6th April 2008.
The much loved Taper Relief , both Business and Non-Business , is to be abolished together with what remains of the old Indexation Relief , and replaced with a new Single Rate of CGT at 18%.
This may be welcome news for those with potentially large non-business gains such as residential property portfolios but may be unwelcome to those currently expecting an effective CGT rate of 10% on business assets.
Consideration will now have to be given prior to 5th April 2008 to determine the timing of certain disposals
http://www.hmrc.gov.uk/pbr2007/pbrn17.pdf
Please follow the above link for sight of HM Revenue & Customs press release.
In another welcome move for taxpayers the Revenue have announced an increase from £500 to £1,000 in the de-minimus limit for making payments on account under the Self Assesment system for Income Tax.
This should assist small businesses with their cash flow at crucial times of the year but also caution needs to be taken to ensure small businesses make proper provision for Income Tax throughout the year in order to meet potentially larger payments on 31st January each year.
This rule will not become effective until after 6th April 2009 i.e. 2009-10
http://www.hmrc.gov.uk/pbr2007/pbrn28.pdf
Please follow the above link for sight of HM Revenue & Customs press release.
Please contact tax@johnston-kennedy.com for further information.