EMERGENCY BUDGET ANNOUNCEMENT

24/06/2010

Chancellor of the Exchequer George Osborne announced his budget yesterday and has imposed austerity measures on every family in Britain with a £40bn package of emergency tax increases, welfare cuts and Whitehall spending restraint designed to slash the budget deficit by the end of the parliament. The most painful announcement was that, from 4th January 2011, VAT will be increased to 20% from 17.5%, a policy shift expected to add an additional £13bn per year in revenue. However the Capital Gains Tax changes were not as bad as had been feared.
 
It was a pleasant surprise to note that this time there were only 45 Budget Notes in 107 pages, compared to March’s 71 in 161 pages. However there still needs to be more time spent on reviewing the small print of the related announcements.

One may hopefully conclude from this that the Coalition will take more time than did its predecessor to consider, consult and discuss, before rushing to introduce hastily drafted legislation. Remember that the March 2010 budget from the previous Labour government was only debated by parliament for three hours before being passed to the House of Lords!

Estate planners can take some comfort: there does not appear to be any new legislation in respect of Inheritance Tax, or any additional anti avoidance measures. There are some small changes announced relating to the Income Tax treatment of trusts and certain trusts set up for compensating asbestos victims. 

The new rules continue to create uncertainty and complexity for clients and their professional advisers. If you are personally handling an estate, or have a client who needs help, please speak to one of our professionals on 0845 126 0891 or email: probatesupport@trustcorporation.com