For IFAs traditionally dealing with the upper end of the market there was little to get excited about in this years Budget. Even with over inflationary increases to capital gains tax (up to £7,500), inheritance tax allowances (to £242k) and the earnings cap (to £95,400) looking generous, a longer memory reminds us that these allowances were pretty measly in previous years.
Lots of good noises about environmentally friendly proposals. A mention of the Kyoto summit gave more than just a nod to Tony Blairs very recent environment speech. Tax incentives for community investment emerging as a separate Budget document, reduced vehicle tax for smaller (and by definition less harmful) cars coupled with reduced duties on "cleaner" petrol, point the way to the Governments thinking. Big picture stuff of £100million to promote environmental technology and 150% accelerated tax credit for cleaning up contaminated land mean the Government intends to put its money where its mouth is. With ethical investment funds already performing well this should give them an extra fillip.
But what a disappointment for those of us who were waiting for annuity rate age to increase from 75 or better still to be abolished. This has to be an increasingly important issue as people live longer and demand greater investment flexibility. The 75 age is too paternalistic for todays pensioner.
Sticking with pensioners, why Gordon Brown thinks that 70 per cent of pensioners not paying tax is a positive is beyond me. It has to mean their income is very low. With the savings ratio expected to fall 4.75 per cent, the Government will have to think of better incentives for retirement savings.
Less red tape for small businesses should be welcomed by small IFA firms in particular.
Whatever your thoughts on the Budget, it will cost the same to drown your sorrows as yesterday, so there is some good news!