10 October 2007 Reaction to Alistair Darling's first Pre-Budget Briefing

Article date: 25.10.07

10 October 2007 Reaction to Alistair Darling’s first Pre-Budget Briefing:
Partner at The Wealth Care Partnership, Tim Anstee, comments on two significant changes announced in the speech:

Inheritance Tax -Threshold Doubles

The Chancellor will introduce with immediate effect an Inheritance Tax threshold increase to £600,000 for married couples. This change will clearly grab the headlines but is actually not going to benefit many of our clients.  Many would already have established this benefit by following our advice and putting in place a Discretionary Will Trust. We do not think that this change in legislation removes the need for a Discretionary Will Trust. Those individuals that have been married for a second time, or those who want to ring-fence assets so that they do not have to be used for care fees in the future, should still put in place a Discretionary Will Trust.
What will be significant is that a widow, or widower, will be able to carry forward a spouse's nil rate band on a sliding scale.
If you have any concerns regarding your own IHT position contact Tim Anstee.

Capital Gains Tax - Small Investors Big Winners

With effect from 6th April 2008 CGT will be charged at a flat 18%. This, as always with changes to the tax system, will benefit some individuals but not others. Out are going the indexation and taper relief calculations and the different payment thresholds 22% and 40%. The system will certainly be a lot simpler to administer and will benefit the short term trader. Short term trading however is not seen as the way investments should be made, as we at The Wealth Care Partnership always advise, risk to an investment is reduced if time is given for the investment to grow. Investments should be for a minimum of 5 years.

If you have any concerns regarding your own CGT position contact Tim Anstee.