The Pre-Budget Report 2009

Personal Taxation

Overview

Despite widespread speculation about an increased capital gains tax rate and the abolition of inheritance tax reliefs, the main change that will immediately affect some private clients, albeit indirectly, is the bank payroll tax, which as discussed below affects a wider category of financial businesses than banks alone. The other headline changes for private clients are:

• Inheritance tax: freezing of the nil-rate band and anti-avoidance to counter "Melville III planning" (under which assets were transferred into trust during lifetime without a 20% IHT charge) and the use of second-hand excluded property trusts;
• Severe penalties for non-remittance basis users who fail to disclose offshore accounts in certain jurisdictions; and
• Additional 0.5% increase in National Insurance contributions from 6th April 2011.

Bank payroll tax - read more
Inheritance tax - read more
Offshore assets - read more
Furnished holiday lets - read more
National Insurance contributions - read more

Corporate and Business Taxation

Overview

Perhaps this pre budget report is surprising for what it did not do:

• increase the Vat rate beyond 17.5%;
• increase the CGT rate of 18% so as to lessen the gulf between the tax rates on income versus capital;
• introduce targeted legislation to prevent income being recharacterised as capital; and
• improve the SDLT general anti-avoidance legislation.

SDLT - read more

DOTAS - read more

Return to the Standard Rate of VAT - read more

Assistance for businesses - read more