Pre Budget Changes

There were some pretty drastic tax changes announced in the pre budget report. For site members the main proposals they'll be most interested in will be:

• Changes to rules that apply to non doms. Stricly speaking the proposals won't just apply to non doms (they'll also apply to non UK ordinarily residents) as the proposals are aimed at anyone who uses the remittance basis of tax. Far from simplifying the non dom rules these new provisions look to actually make them more complex. For many middle earners the decision as to whether to claim the remittance basis and pay the £30K or be taxed on overseas income as it arises will be crucial. Have a look at this article: Changes that will affect Non Doms in the Pre Budget Report and how to reduce your UK tax liability
• Capital Gains Tax Changes. The reduction in the rate of CGT to 18% is very welcome for most property investors. This will make owning property personally advantageous for many property investors. The downside though is that business owners will see a significant rise in their capital gains tax bills on business disposals from as low as 10% to 18% due to the withdrawal of taper relief. See this article for more details: Winners and Losers from the CGT changes in the pre budget report
• Residence changes. From now on days of arrival and departure will be counted when assessing the number of days you spend in the UK.
• Inheritance tax changes. The ability to transfer any unused nil rate band is very welcome for most people and it certainly simplifies the tax planning for the family home. However, in the past they would probably have used nil rate band discretionary trusts in any case to achieve the same tax result. In fact many may still want to use a form of trust struture to save on care home fees and executory costs.