David suggests that “Although the expected increase in CGT rates did not materialise, it is safe to assume that the rate of CGT will not remain at 18 per cent for much longer and the second Budget of 2010 will probably increase the rate (and vindicate the advice and legal work which was carried out earlier in the year).”

If you are thinking of disposing of an asset, do it while CGT is still at 18%

Read the full article here.

Read the full article here or see the excerpt below

“Both Conservatives and Liberal Democrats were obliged to drop some of their campaign promises when agreeing to form a coalition government on Tuesday.

Tory plans to raise the inheritance tax nil rate band to GBP1 million have been shelved for the duration of this parliament. The LibDem proposal for a “mansion tax” on houses worth more than GBP2 million has been dropped, probably for ever.

However the most significant news is that the new chancellor, George Osborne, will soon present an emergency Budget raising capital gains tax rates to levels “similar or close to those applied to income” – that is, from 18 per cent to 40 per cent, in line with the Liberal Democrats’ election manifesto.

The new rate will, however, only apply to non-business assets, and there are to be “generous exemptions for entrepreneurial business activities”. This means shares, second homes and buy-to-let property will be the main targets of the tax.

Newspapers, including the Financial Times, are predicting heavy selling of these assets before the new rate comes into force. It is not yet clear whether the change will be implemented immediately or even retrospectively.

“The hope is that any change will not be before 2010/11 to allow sensible business and tax decisions to be made in good time”, said Francesca Lagerberg, head of tax at accountants Grant Thornton.

Another ominous passage in the coalition’s joint policy statement promises that “all efforts will be made to tackle tax avoidance, including detailed development of Liberal Democrat proposals.

“This could include a campaign proposal by Vince Cable (now a minister) for a general anti-avoidance provision for corporation tax.

Before the election the party also advocated closing “loopholes” such as preventing the avoidance of stamp duty land tax by transferring property into offshore trusts, restricting non-dom status to a maximum of seven years, and stopping business owners paying themselves in dividends taxed at 18 per cent.

The Tories’ proposal for limited transferability of personal tax allowance between spouses has not been dropped, but Liberal Democrat MPs will be allowed to abstain on budget resolutions dealing with it.

The emergency budget will appear before the end of June, aided by an independent Office for Budget Responsibility.

A full spending review will be held during the summer, reporting in autumn. This will follow a “fully consultative process involving all tiers of government and the private sector”, says the new government.”

Source

STEP Journal

In support of Lewis-Manning Hospice, local solicitors are donating their time to prepare standard wills free of charge in return for a donation to the hospice. Any sum is welcome, but suggested minimum donations are £75 for a single will and £110 for a pair of mirror wills. If your will is not standard, the solicitor will inform you and agree a fee before going ahead. There is no obligation to leave a gift to Lewis-Manning in your will but the hospice is deeply grateful to all the people who support them in this way.

‘Make a Will Week’ falls in June, which is National Hospice Awareness Month – a very important time in the hospice calendar when, as well as trying to raise much needed funds, activities are focussed on raising the profile of hospices and the vital role they play in the provision of palliative care services within the local community.

If you are interested in having your will drawn up or updated during ‘Make a Will Week’, please contact Gillian to make an appointment.

Opened in 1992, Lewis-Manning Hospice is Poole’s local voluntary hospice for adults providing the highest standard of specialist palliative nursing care completely FREE of charge to over 650 local people living with cancer and other life threatening and life limiting illnesses. After the contracted contribution from the NHS Bournemouth and Poole, the monthly running costs of the hospice exceed £50,000, for which the hospice relies on the support of the local community and fundraising initiatives.

For further information, please contact Stephanie Thorne on 01202 701000, email legacies@lewis-manning.co.uk or visit www.lewis-manning.co.uk / www.timetocareappeal

Read the full article at the STEP Journal or read the extract below.

The Conservatives estimate that the change would affect more than 120,000 businesses, costing the owners an average of GBP4,000 each a year. It would raise GBP25 million in 2011/12 and GBP15 million in 2012/13.

But a general election has now been called and the Finance Bill has to be forced through within two days. This gave opposition politicians the chance to demand concessions from Chief Secretary to the Treasury Liam Byrne. They chose three – the holiday lettings tax, the “cider tax” and the “broadband tax”.

According to The Times, both George Osborne (Conservative shadow Chancellor) and Jeremy Browne (Liberal Democrat Shadow Chief Secretary to the Treasury) claimed credit for the government’s retreat.

Both opposition parties have attacked the measure in the Commons, agreeing with many business associations that it could damage the British tourism industry.

The abolition of holiday let relief was originally triggered by a European Commission ruling that the UK government could not apply it only to homes in Britain; it had to apply to homes anywhere in Europe, or none at all.

The government decided to accommodate this by making the relief apply to all homes during 2008-10, and then abolishing it altogether from April 2010.

Financial Secretary to the Treasury Stephen Timms said that, if the measure doesn’t go ahead, the Treasury will have to pay tax relief to everyone with a holiday home within the EU.

So owners of holiday lets in European Union member states now have an extra window of opportunity to claim tax relief. The election result will determine how long the window remains open.”

“We are making changes that we believe will improve the services and support we provide to agents dealing with Trusts and Estates. We hope that by working together, the changes do not cause problems on either side.  Our aim is that, whilst working with the resources available to us, we can find ways to improve your access to our support and our interaction with agents.   We also want to provide reassurance about an amendment we have made to the 2009 -2010 Trusts & Estates SA 900 return that is linked to one of these changes”

Read the full article here

Sources

STEP, HMRC

“Once again, the Government is going for the jugular as it attacks your income and your wealth. But there are ways to fight back.”

Read the full article here

Read the full article on the STEP Journal or read the extract below

The 650,000 figure comes from Frank Nash of accountants Blick Rothenberg, quoted in the Daily Telegraph. Nash says the freeze could cost a couple an additional GBP37,000 in IHT in real terms over four years, if inflation continues at around 3 per cent.

It will particularly affect couples whose joint assets are worth over GBP650,000, said Richard Mannion of accountancy firm Smith & Williamson.

“With the IHT rate currently at 40 per cent this may result in a significant further financial burden, especially for those whose wealth is wrapped up in property with little liquid cash”, he said. “The freezing of the nil rate band does create clear political water between Labour and the Conservatives.”

John Richardson, head of advice policy at Towry Law, said the long freeze would lead more families to consider estate planning opportunities, and more trustees to consider tax-efficient investment structures to minimise the ten-year anniversary charges.

As already reported, the Treasury will this summer work out a method of bringing inheritance tax planning into the list of activities that have to be reported to HM Revenue & Customs as tax avoidance schemes – the the Disclosure of Tax Avoidance Scheme (DOTAS) rules.

Source

STEP

Will Aid is a fundraising campaign involving nine of the UK’s leading charities (ActionAid, British Red Cross, Christian Aid, Help the Aged, NSPCC, Save the Children UK, Sight Savers International, SCIAF and Trocaire.)The objective of the campaign is simple but compelling: to encourage people to make a Will with a solicitor and at the same time raise vital funds for the Will Aid charities.

For the first time ever, Will Aid have received over £1m in donations and Gift Aid.   Will Aid will makers have also pledged over £5m in legacies which will be a valuable support for the work of the charities in years to come.  The money raised will make a real difference to the lives of vulnerable people around the world.

For more about Will Aid click here or contact Gillian

Read the article on The Times

The following is from the OPA website

The improved Lasting Power of Attorney forms give the person you choose the power to make decisions about your property or personal affairs if you have an accident or illness that stops you being able to make decisions for yourself – for example a brain injury or a degenerative disease.

Speaking at the launch of the new forms, Martin John said:

‘Should you lose mental capacity, it is important to know that someone you trust will be making the important decisions about your health, welfare and finances. The new and improved Lasting Power of Attorney forms make it easier than ever to achieve the peace of mind that comes with knowing future decisions will be taken in accordance with your wishes.

‘I know that people were having difficulty with the Lasting Power of Attorney forms – they were long and users frequently made mistakes. The new forms, which will be available on our website from the 1 October, have undergone robust testing and I’m confident that people will welcome the clearer content and design of the guidance.’

You can view the new forms and guidance in the ‘Making a Lasting Power of Attorney‘ section of our website.

You can also read the press notice on the  Ministry of Justice Website