View more on these topics

Technical Connection’s Budget 2005 Introduction

This year’s Budget was bound to be a bit different. With a General Election around the corner, it was clear that the March 2005 Budget would primarily be used for election sweeteners with some of the proposed more technical measures reserved for the Budget that will inevitably follow the General Election.

There were, of course, areas where the Government were being put under pressure to make changes. This was especially the case in the area of housing where it was clear that the £60,000 starting point for stamp duty land tax was way out of line with the current average price of a first time purchase.

Those who jumped on the house purchase ladder some years ago now face another type of problem – that of a potential inheritance tax bill on the private residence on the homeowner’s death or the death of a surviving spouse. Here the problem was very much one of the nil rate band (the starting point for inheritance tax) not keeping up with house price inflation. The fact that the nil rate band has only increased by 18% over the last 8 years whilst house prices have increased by about 84% means that many more houses are caught. Indeed the results of one recent research indicate that as many as 2.4 million houses are caught. How would the Chancellor deal with this problem, if at all?

Whilst on the subject of inheritance tax, another question was whether we would be treated to more information on proposed regulations on the new pre-owned assets tax to go with last week’s press releases dealing with valuation (amount and dates) and family equity release arrangements?

And would any announcement be made on the post A-Day inheritance tax implications of the transfer of a pension fund (under alternatively secured pension) to a deceased member’s beneficiaries via a SIPP of which they were also members?

There were, of course, other areas where change could have taken place. For example:

  • tax avoidance: would the Government announce an extension to the disclosure rules introduced last year?

  • residence and domicile: would further action be taken to implement change following the consultative document in 2003?
  • trust tax reform: whilst some measures have been implemented, a number are still in the consultation phase. Would these now be introduced?

And what did we get?

  • Further extension to the anti-avoidance measure requiring disclosure of information on tax avoidance schemes to be given to the Revenue

  • More specific anti-avoidance provisions

  • An increase in the income tax personal allowance, age allowance and the CGT annual exemption

  • Introduction of a standard rate band for some trusts and special treatment of trusts with vulnerable beneficiaries

  • Announcement of further consultation on Real Estate Investment Trusts

  • The announcement of further consultation on the subject of trust tax reform

  • An increase in the threshold for stamp duty land tax to £120,000

  • An increase in the nil-rate band for inheritance tax to £275,000 with a phased increase to £300,000 in 2007/08

  • A commitment to keep the maximum annual ISA investment at £7,000 until 2010

  • Tax equality for civil partners

In our view, it is important to ensure that you are equipped to have sensible discussions with your key clients and distributors (as appropriate) on the key taxation issues arising from this year’s Budget. Our Budget Bulletin seeks to provide you with the relevant information you need.


Willetts says ABI urged him to back stakeholder

Shadow Work and Pensions Secretary David Willetts has revealed that he only suppor-ted the idea of stakeholder pensions after the ABI urged him not to oppose it.

Zero rate stamp duty threshold raised to 120,000 in today’s budget

The Chancellor has doubled the zero-rate stamp duty threshold to 120,000 from 60,000 from midnight tonight.This is the first rise since 1993 when the average house price was 64,000 according to the Council of Mortgage Lenders.There is no change to the charge on residential transactions where the consideration exceeds 120,000. There is no change to […]

Health - thumbnail

Healthcare predictions for 2015 from Jelf Employee Benefits

The continuing fall-out from the Competition and Markets Authority’s (CMA’s) review, the rise of the private GP and digital engagement will be the primary focuses in the private healthcare industry during 2015, according to Iain Laws, managing director, healthcare and group risk, at Jelf Employee Benefits.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm