The December General Election meant that the Autumn Budget was delayed and we now know that Sajid Javed will deliver his first Budget on the second Wednesday in March which is when Budget day used to be!
We are expecting that the tax measures in the Conservative Party manifesto will be announced again together with confirmation that changes consulted on last year will be put in place.
Key tax announcements to listen out for include leaving the rate of corporation tax at 19% and an increase in the national insurance threshold. Unfortunately, it is unlikely that the planned roll out of the “off-payroll” working (IR35) rules to the private sector will be delayed.
The Chancellor is also expected to again announce a u-turn on the 2019 loan charge following a review of the legislation by Sir Amyas Morse.
WILL INHERITANCE TAX BE SIMPLIFIED?
Another announcement to listen out for in the Spring Budget is whether the Chancellor acts on the recommendations of the Office of Tax Simplification (OTS) regarding inheritance tax (IHT). As reported in an earlier newsletter, the OTS suggested simplifying IHT on lifetime gifts including reducing the period of potential exemption from 7 to 5 years. Such a change would mean that the donor would only be required to survive for 5 years following a gift for the transfer to be exempt from IHT.
The OTS also suggested that the conditions for Business Property Relief might be tightened up by aligning the rules with the definition of a trading company for CGT. This relief currently provides 100% relief on the transfer of shares in an unquoted company. The suggested change would mean that more transfers of shares would potentially be liable to IHT and may require a careful review of your plans if you are looking to pass on your business.
If you require specific advice on tax relief please get in touch with one of our tax planning experts.