Capital Taxes
Stamp duty land tax
A number of changes to stamp duty land tax (SDLT)
were announced, including:
- Where connected parties exchange property, the
values of the two properties will not be ‘linked’ for determining the
rate of tax from the date of Royal Assent.
- Payment of SDLT will no longer have to accompany
the SDLT return from Royal Assent.
- There will be an exemption from SDLT for purchases
of new zero-carbon homes valued at up to £500,000. For purchase prices
above that level, a £15,000 reduction to the normal SDLT liability will
apply from 1 October 2007.
Pre-owned assets tax – late elections
From 21 March 2007, HMRC will be allowed to accept,
after the normal deadline, an election for assets to be treated as part of an
estate for inheritance tax purposes rather than to be subject to pre-owned
assets tax. The change may also apply to elections for 2005/06 that were
late.
Capital gains tax
The capital gains tax annual exemption for 2007/08
will be £9,200 for individuals and a maximum of £4,600 for most
trusts. The Finance Bill will contain anti-avoidance legislation, effective
from 6 December 2006, aimed at certain capital loss based avoidance
schemes.
Inheritance tax
The inheritance tax nil rate band will increase to
£300,000 for 2007/08. It will then rise each year to reach £350,000
in 2010/11.
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Tax Tip
Make a will. If you die without making a will, your assets
will be divided between your relatives according to the intestacy rules after
inheritance tax is paid at 40% on any value above £300,000 that goes to
relatives other than a spouse or civil partner. If you have no surviving
relatives, the same tax will be paid, but the Crown (ie the government) will
claim the balance. To avoid this, if you have no relatives, make a will leaving
your estate to the charities of your choice. Anything left to charity is free
of inheritance tax. |
Recognition of stock exchanges
HMRC will be able to designate as a recognised stock
exchange for tax purposes any investment exchange designated as a recognised
investment exchange (RIE) by the Financial Services Authority (FSA). The move
will ensure equal tax treatment for FSA-listed shares, regardless of which RIE
is used as the primary market for the shares. The measure will take effect from
Royal Assent. |
