On Wednesday, 18th March 2015, the Chancellor George Osborne will announce the details of his 2015 Budget. He will be addressing the House of Commons at around 12.30pm – has his time run out?
It’s his last opportunity before the general election in May to make changes that will affect the finances – for better or worse – of UK households. So what will be his pre-election giveaways, as there surely will be some even though he has little room for large pre-election giveaways? Apart from his inner circle, no-one will know for certain what George Osborne has up his sleeve, but below are my predictions based on a review of the weekend papers.
- The housing market is becoming increasing inaccessible to voters, especially the younger ones. The overhaul of the Stamp Duty Land Tax system that was introduced last year was a welcome change. To raise extra funds, there is noise that the Chancellor may announce a withdrawal of Private Residence Relief on houses worth more than £2million … which would be more palatable if the Chancellor announced that the family home was exempt from IHT.
- Last year huge changes to pensions were announced and there is a lot of concern about ‘scammers’ and people making disastrous decisions with their savings. The Chancellor may well bring in more protection in this area. Also a 30% flat-rate of income tax relief on pension contributions has also been mooted.
- A lifetime cap on the total amount than that can be invested in the ISA tax-free savings accounts has been rumoured.
- It may be time for the Chancellor to make good on his promise to increase the IHT lifetime threshold from £325,000 to £1,000,000. I doubt he will take this huge leap, but he may increase the threshold meaningfully or maybe make the family home exempt from IHT.
- Undoubtedly more legislation to prevent tax evasion or avoidance will be announced. As well as targeting larger corporates it is also mooted that an announcement is also expected on the current financial incentive for individuals to register as a company and work on a self-employed basis.
- To tackle concerns about immigration, the Chancellor could announce a tax on non-UK residents or a restriction on non-UK residents’ ability to claim the UK personal allowance.
- Expansion of the Enterprise Investment Schemes (EIS) and Seed Enterprise Investment Schemes (SEIS) is widely forecast in the British media to help UK small business thrive.
- The big question is will George announce that the top rate of tax will be reduced from 45% to 40%?
Sharron Fletcher, Partner at RAE Business & Property, contact on 07587 709008 or email firstname.lastname@example.org