The Chancellor of the Exchequer, George Osborne, presented his third Budget speech to Parliament on 21 March 2012. It maintained the government\u2019s strategy to reduce the deficit, contained far-reaching tax reforms and support for growth and reward for work. The Chancellor set out the actions the government will take in three areas – creating a stable economy, a fairer, more efficient and simpler tax system and further reforms to support growth.<\/p>\n
Tax matters<\/strong> In contrast to the reduction in the top rate of Income Tax, there was a focus on increasing the take from other taxes, with a number of new measures aimed at raising more revenue from the wealthy.<\/p>\n Residential property <\/strong> Child benefit <\/strong> Tax avoidance <\/strong> Inheritance Tax<\/strong> Other measures<\/strong> Levels of tax benefits are based on current or proposed legislation and may vary as a result of statutory change and their value will depend on individual circumstances<\/em>.<\/p>\n","protected":false},"excerpt":{"rendered":" Creating a stable economy, a fairer, more efficient and simpler tax system and further reforms to support growth The Chancellor of the Exchequer, George Osborne, presented his third Budget speech to Parliament on 21 March 2012. It maintained the government\u2019s strategy to reduce the deficit, contained far-reaching tax reforms and support for growth and reward… Read more »<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=\/wp\/v2\/posts\/1602"}],"collection":[{"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1602"}],"version-history":[{"count":0,"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=\/wp\/v2\/posts\/1602\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1602"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1602"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1602"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nThere was a welcome increase in the Income Tax Personal Allowance for the 2013\/14 tax year to \u00a39,205, not far off the government\u2019s stated target of \u00a310,000.
\nHowever, for the elderly this was largely neutralised – or worse – by the unexpected abolition of the Age Related Personal Allowance from 2013\/14 for those not yet 65, and the freezing of the allowance for those who are.
\nThen there was the reduction in the highest rate of Income Tax from 50 per cent to 45 per cent from 2013\/14. It seems likely that taxpayers may wish to delay income receipts until after 5 April 2013, if they are able.<\/p>\n
\nA new higher 7 per cent Stamp Duty Land Tax (SDLT) rate on properties costing more than \u00a32m was introduced. Also, the UK will now copy many other countries in taxing the gains realised by non-residents on UK property disposals. However, this will (at least initially) not apply to individuals, and will apply only to gains realised on residential property.<\/p>\n
\nChild benefit will now bring a reduced benefit for those with income of over \u00a350,000 (this is subject to tapering when the claimant earns over \u00a350,000, with it being reduced entirely for those with an income over \u00a360,000).
\nThe first steps were also taken to limiting the amount of tax reliefs such as charitable gifts, losses and loan interest. From 2013\/14 the total relief will be limited to \u00a350,000, or 25 per cent of the individual\u2019s income, whichever is the greater.<\/p>\n
\nAs part of the government\u2019s plan to introduce further measures against tax avoidance, it was no surprise that the headline measure was the new SDLT rate of 15 per cent for residential properties acquired for more than \u00a32m by certain \u2018non-natural\u2019 persons (i.e. not individuals). This applies immediately and it is also planned to introduce an annual charge for properties owned by these non-natural persons, but only from 2013. The Chancellor made it clear that attempts to circumvent the new rules would be blocked retrospectively.<\/p>\n
\nOther welcome measures included a proposal to increase the Inheritance Tax (IHT) threshold from \u00a355,000 for gifts from a domiciled to a non-domiciled spouse (or civil partner); and for the non-domiciled spouse to elect to be treated as domiciled – thus allowing full IHT exemption.<\/p>\n
\nMany previously announced measures remained unaltered, such as the limits for tax-favoured investments in Enterprise Investment Scheme (EIS) shares (\u00a31m from 6 April 2012) and Venture Capital Trusts (VCT) shares (\u00a3200,000 from 6 April 2012), and the IHT threshold (remaining at \u00a3325,000). \u03bd<\/p>\n