Budget 2006

Now the Chancellor has made his 10th budget it is a good time to put your tax affairs in order, particularly before the end of the tax year on 5th April. You might like to make use of all annual allowances before it is too late and also take very urgent advice on pension arrangements before pensions “A” day (6th April) arrives.

John Leggett the Senior Partner at Parrott & Coales says:-

“Both our business and personal clients will be affected by this year’s budget. The single person’s allowance for most people will go up to £5,035. If you are in the middle of buying a house stamp duty might be uppermost in your mind. The SDLT threshold for residential property transactions has been increased from £120,000 to £125,000 but only applies to transactions from 23rd March 2006. So if you can keep the price under £125,000 there is no stamp duty at all. The rate above that remains 1% up to £250,000 and other rates as before."

Major changes were made from 22nd March 2006 on the inheritance tax treatment of Accumulation and Maintenance trusts and interest in possession trusts which will encourage the giving of assets to children at 18 when they may not really be adult enough to have control of them. The changes have been criticised already by accountants. Obviously legal advice should be taken.

There are lots of other changes too. For employers it should be noted that the tax exemption for employees who are given home computing equipment will end on 6th April, at present this is usually tax-free where the value is up to £2,500. The inheritance tax threshold will rise from £275,000 to £325,000 over four years. If you need any advice on how the budget affects you call Parrott & Coales on 01296 318500 and we will be happy to advise you.

Please contact:

John Leggett at Parrott & Coales for advice on 01296 318500

Email: john.leggett@parrottandcoalesllp.co.uk