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We help you pay less tax!


Alastair Darling’s first pre-budget report in October proved to be controversial in more ways than one; whether Labour was being accused of taking Tory ideas on Inheritance Tax, the backlash from the proposed changes for Capital Gains Tax, or the proposals for non-domiciles.

What is clear is that he has created some significant tax saving opportunities providing appropriate action is taken, in some cases prior to 6th April 2008. As well as the normal tax saving ideas, this edition includes details of some of the main changes from the pre-budget report and their implications. 


Mixed blessing capital gains tax u turn!

The pre-budget report included proposals to almost double capital gains tax from 6th April 2008 for many business and commercial property owners, which has resulted in fierce opposition from a number of groups. However the proposals are likely to be a welcome change for many other individuals, including those with second homes, holiday homes and residential properties rented out, who will pay less capital gains tax under the new rules.

Alastair Darling’s proposals include scrapping the taper relief system brought in under Gordon Brown and replacing it with a flat 18% rate of tax. There is talk of a possible relief being introduced for retiring business owners, the details of which may be included in draft legislation expected later this year.

At the time of writing Alistair Darling’s response to the vigorous lobbying following the announced changes had been delayed yet again.  Until his response is published this whole area of tax planning remains uncertain

However, what does seem certain is that taper relief will go and many owners of business assets are likely to pay more Capital Gains Tax when they come to sell up. It may be possible to reduce the impact of the changes, providing action is taken prior to 6th April 2008. Please talk to us if you;

  • are considering transferring your partnership or sole trader business into a limited company,
  • are thinking of exiting your business in the next 5 years,
  • are looking to bring in new business owners in the near future, or
  • own commercial property or land that you may be looking to sell shortly.

Anyone looking to dispose of non-business assets, such as a second home, or listed shares should perhaps consider the impact of the new rules and whether it is in fact worth delaying the disposal until on or after 6th April 2008 to take advantage of the new rules to save tax. Unfortunately where assets were acquired prior to 1998 the position is not so clear and so advice should be taken.