Following the change of Government, the indications are that there will be a budget within 50 days. Whilst there will undoubtedly be a number of surprises in this budget, and it is always difficult to second guess tax policy, the indications based on manifesto pledges and policy statements are that there will be some specific changes. I have set out brief details below of some areas where we believe there may be changes. 

1.         There are likely to be substantial changes in the Capital Gains Tax legislation. This is likely to affect non business assets more than business assets and therefore if you are considering disposing of any non business assets in the near future, it may be worth reviewing whether this disposal could be brought forward.

2.         There are indications that in April 2011 the Income Tax personal allowances are likely to rise substantially, and at least part of the proposed National Insurance increase put forward by the previous Government, may be scrapped.

3.         The Conservatives’ plans to increase the Inheritance Tax threshold appear to have been put on hold as do the Liberal Democrats’ Pension Tax proposals, and it would therefore seem appropriate to review any Inheritance Tax or Estate planning this summer now that changes to the legislation are less likely.

4.         An increase in the VAT rate looks increasingly likely, although the timing is uncertain. The effects of this will depend on a number of factors, and if you have concerns we can discuss these in more detail with you.

As always taking specific action on the expectation that legislation may or may not change is uncertain and not to be undertaken lightly. However, if you are intending to dispose of assets, or reviewing any other aspect of your personal or business situation, it may be worth advancing those plans. This is particularly so in relation to Capital Gains Tax to take advantage of the historically low rates that are unlikely to continue. 

 If you have any questions please do not hesitate to contact Adrian Hemmings or Jean-Paul Quertier on 0844 257 9232.

ahemmings@simpkinsedwards.co.uk or jpquertier@simpkinsedwards.co.uk