Stone Rowe Brewer LLP Partner, Pauline Lawson, takes a closer look at the announcements in today’s budget…
Apart from being one of the most entertaining hour of television that we have seen for a long time, the Chancellor proved that he has many friends in the newspaper industry as the leaks in advance of the speech proved to be uncannily accurate.
There is to be a new inheritance tax allowance of £175,000 to deal with the family home which can be passed onto your spouse or (civil ?) Partner. The Chancellor only mentioned “partner” in his speech. The new rules commence in 2017 and we await the detail. There will be tapering of the relief for estates over £2million.
There will also be changes to the non-domicile status with the warning that this was always meant to be temporary. If you have been resident for 15 out of 20 tax years then you will be subject to full British taxes on your wealth including capital gains . Again the new regime will come into effect in April 2017.
The changes to tax relief on mortgage payments on buy to let mortgages may result in many converting to repayment mortgages and paying down those loans.
There is to be a new £5,000 allowance on dividend income and the Chancellor envisages that 85% will either see no change or may even be better off.
Added to that the change in the rates of Corporation Tax (down from 20% to 19% from 2017 and 18% from 2020 which will be good news for the business community as will be the ability to employ 4 workers on the new Working Wage by enjoying a cut in N.I. Contributions for small firms – again details awaited) – all makes this an exciting time.
Indeed the finale of the new Working Wage was the moment when the Chancellor seems like a Jack in the Box as he repeatedly had to sit down because of the hecklers in the opposite benches. There will be detractors but the government is clear that “the British people trusted us to finish the job.”
If you wish to know more about how the Budget affects your situation, please contact a member of our private client team on 020 8891 6141.