‘Summer’ budget private client implications
George Osborne has announced that there will be an interim ‘summer’ budget on 8th July. We can also expect a second Finance Bill. There are a number of measures of interest that are of particular interest as far as personal legal services are concerned, such as a potential new transferable main residence allowance for inheritance tax, a review of deeds of variation, changes to the taxation of relevant property trusts and changes to the remittance basis.
We can expect the second Finance Bill to include the ‘tax lock’ legislation that the Conservatives promised to introduce. They pledged to introduce legislation to guarantee that there would be no increase in income tax, national insurance and VAT rates for five years.
We may also find that the ‘summer’ budget and second Finance Bill include some of the measures announced by the previous government, but not included in the Finance Act 2015. For example, the review of deeds of variation as a means of mitigating inheritance tax may be included as may changes to the taxation of relevant property trusts, a minimum claim period for the remittance basis and the creation of a secondary market for pension annuities.
In addition to the measures mentioned above and those announced in the March 2015 Budget that were not included in the Finance Act 2015, it is likely that the Conservative Government will begin implementing the promises they set out in their manifesto. We can expect a new transferable main residence allowance for inheritance tax, an increase in the tax-free personal allowance to £12,500 and higher rate threshold to £50,000, and an increased remittance basis charge.
Whatever the ‘summer’ budget may hold, it is almost inevitable that further tax avoidance measures will follow.