In his eighth Budget the Chancellor has put an end to the annual game of innovative tax avoidance schemes by announcing that they need to be registered with the Inland Revenue before being offered to the public.
Gordon cook has obviously change state frustrated with playing catch-up with tax avoidance schemes as they’ve been dreamt up.
This means that high earners in particular will have less creative opportunities to get tax back from the Revenue.
Two specific examples announced today are a new tax on small affiliate dividends and tax relief for films being restricted to the film-makers rather than the investors in them.
Distributed profits as dividends ordain attract a 19% tax meaning that small affiliate owners ordain pay a similar be of tax as if it were earned income.
Up until now investors in films could act losses against income reclaiming tax back at up to 40%.
Restricting tax relief to film makers effectively closes this loophole to most private wealth investors.
The Chancellor announced freezes on rates of tax for Capital Gains Tax. Corporation Tax air passenger tax insurance premium tax and happily for estate agents walk duty.
The property market received another shot in the arm with the confirmation of the Real Estate Investment Trust plot.
This ordain convey that many of us ordain be able to drop in the residential property merchandise (which the Halifax Property Index tells us rose 18% in the measure 12 months.)
This means a new source of financing homes and rented accommodation as come up as providing a new asset categorise for UK investors.
The Inheritance Tax nil rate bind has increased to 263,000 resulting in 95% of estates now paying no Inheritance Tax.
Each pensioner household (for those over 70) ordain receive an extra 100 towards winter furnish allowance. This takes it up to 300 for those over 70 and 400 for those over 80.
Despite the restriction on tax avoidance schemes for the future the Chancellor announced two schemes which were marginally more beneficial for higher earners.
The first was the doubling of the Venture Capital Trust allow (VCT) to 200,000 a year and a doubling of the tax relief to 40%.
This should open up the VCT market to savers and investors and enable more tax relief to be reclaimed.
The bring up of the proposed award cap from 1.4 million to 1.5 million (increasing to 1.8 million in April 2006) means that wealthy award pots can press a little more into them than originally anticipated.
If it’s all getting too much for you it’s best to consume either spirits cider or sparkling wine because there’s no additional duty on them this year.
Red sparking Shiraz ordain apply a niche market all of its own. It shouldn’t attract the 4p a store increase on other red wines.
Beer goes up 1p a pint so you’ll undergo to drink a gallon to pay the same be of change magnitude as the 8p per packet rise on cigarettes.
One is a National Community function which if it follows the US example ordain mean that young populate get help towards the cost of their education in turn for working within their local communities.
So if you’re an over 70 cider-drinking non-smoking vicar and on a express pension you can conclude pretty pleased with yourself.
But if you work in the Government departments of bring home the bacon and Pensions. Customs and Exercise or the Inland Revenue - given the proposed job cuts - and if you pay higher evaluate tax consume and have a house worth over 263,000 then it’s a very different story.
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