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This year has seen a significant change to Inheritance Tax rules (see
Topical
Tips 105) which is generally good news for UK taxpayers. The rule
change allows couples (whether married or civil partners) to benefit from
sharing their IHT nil rate bands. Whilst this effect could already be achieved
by decent will planning, this simplification is to be welcomed.
However, the simultaneous announcement of a change to Capital Gains tax (see
Topical
Tips 104) seems to be a blunt and thoughtless reaction to the 10%
rate of tax on business assets that gave perceived unfair advantages to some
taxpayers. Publicity about the rule changes focused on their impact on private
equity funds, but the real blow will be felt by owners of business assets (i.e.
the Barnes Roffe client base!). It is interesting to note that this blocks the
rather unusually low rate of tax afforded to property investors by what was
widely perceived to be an unintentional rule change by this government in 2000
(and extended in 2004). This allowed property investors to achieve the 10% rate
of tax on their assets if they had the correct type of tenant. It is suspected
that this error in 2000 has cost the government dearly as property prices have
continued to rise, and this might have been the significant factor in deciding
to increase the tax rate. The Chancellor has conceded the need for further
consultation over his proposed changes, the result of which is due to be
announced in the next few weeks.
As ever there will be winners and
losers with all changes, but we hope that by alerting you using our Topical
Tips service we can continue to keep you informed of matters that will impact
on you. We look forward to 2008 and hope that you look forward to
receiving our emails. |
