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IHT changes on the way?

With election fever now yesterday’s lunch all eyes are on Alistair Darling’s first pre-Budget report and Comprehensive Spending Review with plenty expected for the industry to digest.

The Government has blamed the huge poll turnaround on Shadow Chancellor George Osborne’s IHT sweetener and could counter this move with proposals of its own tomorrow.

In a television interview at the weekend, Darling was careful not to attack the principle of raising the IHT threshold significantly and said “all taxes are kept under review”. As it stands, the threshold is set to increase to £350,000 in 2010 from its current level of £300,000.

Worryingly, this could be accompanied with a hit on trust rules with memories of the complete mess the Government made of its 2006 IHT clampdown fresh in the minds of many.

Changes to non-domicile status could also be revealed in response to Osborne’s £25,000 a year levy plans which have also gone down well with the electorate and triggered a barrage of arguments between the Government and the Tories over whether the figures add up.

The Treasury started a non-dom review in 2003 that has never seen the light of day and the Government will have to balance any plans to increase tax revenues with concerns it could scare off big business.

The Prime Minister announced at the Labour conference the PBR will contain a crackdown on private equity and advisers will be watching with interest to ensure any changes to business asset taper relief do not have the unintended consequence of damaging an important device adviser firms- such as Positive Solutions- have used to grow organically.

Aegon says the industry should also keep its eyes peeled for potential changes to pension rules to encourage more innovation in the decumulation market, with current unsecured pension rules sitting uncomfortably with guaranteed income products.

Head of pensions development Rachel Vahey says the government could also bring forward its annuities review- scheduled for December- and suggest potential relaxations to the requirement to buy joint annuities with protected rights funds.

Events in the Commons may overshadow the grilling FSA chief executive Hector Sants and chairman Callum McCarthy will receive from the Treasury select committee tomorrow morning.

Conservative vice-chairman of the committee Michael Fallon has said the FSA will be regarded as the prime suspect by the TSC for failing to properly supervise the bank.

New chief executive Sants has kept a pretty low profile with regards the Northern Rock saga, compared to McCarthy, but can expect a barrage of tough questions from MPs.

The TSC will also tomorrow publish a follow up to its work on financial inclusion with a report on shorter term savings products.

Elsewhere, Aifa has appointed a new director of public relations and marketing, taking over at a crucial time for the trade body.

Tracy Elwick, who was previously group marketing manager for Pet Protect Ltd and has also experience as a consultant within Government departments, takes over from Tracey Mullins who left Aifa to move to Dubai.

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