2006 Budget Summary

Once again it was Mr Brown at the podium instead of in number 10 and he made a point of reminding us that as Chancellor has presented ten successive Budgets.

There were a few ‘sweeteners’ that were of little help or interest to most people. For example he aimed for popularity by freezing the duty on spirits and champagne and acknowledged Green issues by increasing Vehicle Excise Duty on gas guzzling cars. As usual, the speech contained a great number of statistics to demonstrate that the economy is thriving under the best possible management and that this party was better than previous governments.

What this speech did not include was much of the detail of the tax changes for individuals and businesses. That was contained in 156 pages of press releases and the Treasury "Red Book" that are published the moment the Chancellor sits down. This booklet summarises the main changes, reveals some of those details that the Chancellor did not mention, and outlines their likely impact on the average taxpayer.

Significant points

Income tax allowances and thresholds increased in line with inflation

Restriction of exemption for loans of mobile phones and computers to employees

Increase in threshold for Stamp Duty Land Tax on houses to £125,000

Abolition of 0% corporation tax rate, but no other changes to small business tax. For further details on this do not hesitate to contact SFS

No changes to tax rules on main residences or husband and wife companies

Changes to relief's for Venture Capital Trusts and Enterprise Investment Scheme

Closure of possible IHT loophole using pension funds

IHT to be imposed on most new trust arrangements

April 2006

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