Taxbriefs Commentary Library

Further post-Budget and Finance Bill thoughts

Danby Bloch, 05 Apr 2013


 

The Budget and Finance Bill winners and losers become even more apparent in the aftermath of the Budget and these themes run through the whole of the April edition of Taxbriefs Financial Timesaver.

The main losers are clearly the tax avoidance industry and their customers. This year provides an unprecedented degree of focus on avoiders. There is the introduction of the general anti-abuse rule (GAAR) for a start. This rule had been foreshadowed in other economies but in the UK it is something quite new.

Then there is some fearsome specific anti-avoidance legislation – for example in corporate tax, IHT and, most draconian of all, stamp duty, where the authorities have promised retroactive legislation if it turns out to be needed.

There have been a few winners, however. The reduction in the top rate of income tax from 50% to 45% will make some high net worth and high income clients happier.

But they don’t have much to celebrate, what with so much fiscal drag in evidence. The IHT nil rate band has been frozen, and so have other key points in the tax ladder including the threshold to additional rate income tax, and the level of income at which the personal allowance is withdrawn. What’s more, the annual and lifetime pension allowances have come down further.

So the need for tax planning has seldom been greater.

And a point that most commentators have missed is that the reshaping of the benefits system and the introduction of limits to many state hand-outs has made the need for financial protection – life and health cover – even more essential. The state really cannot now be depended on to provide enough if a breadwinner dies or is incapacitated and cannot work.

 


Print  | 
 |  Back to Library

Danby Bloch

Editorial Director, Taxbriefs

Danby Bloch is the editorial director of Taxbriefs, chairman of city-based IFAs, Helm Godfrey and director of Nucleus, an independent wrap provider.

Over a period of more than 40 years, Danby has established himself as one of the industry's leading thinkers and  is a respected author, lecturer and trainer on tax and financial planning.

 

 

Taxbriefs

© Taxbriefs Limited 2012-2015
Registered in England No. 1247331
Registered Office: Wells Point, 79 Wells Street, London W1T 3QN

Centaur Media
Join us on LinkedIn