What does the election mean for tax?
Tax was a discussion point more than ever in the election campaign, but now we have a new government what will happen?
As at the date of writing (15 May) we don’t know when (or if?) there will be a second Budget for the government to set out their spending and income plans and so tax advice is in a bit of a limbo.
The Conservative election campaign included various tax matters and two of the most interesting are:
- Income Tax, VAT, and National Insurance rates will not increase during the 5 years of this government. However, none of Corporation Tax or Stamp Duty Land Tax or Capital Gains Tax were mentioned – so, watch this space!
- Inheritance Tax limits will be increased to £1 million for married couples and civil partners, and there will be a “main residence” allowance of £175,000 for passing the family home to children and grandchildren where the estate is worth less than £2.35 million. “This seems unfair for single people,” says Victoria Bishop, robinson+co’s Tax Partner, “and also childless couples. It is not yet clear how the rules will work in practice – or indeed whether they will become law at all.” So, watch this space!
What is clear is that this government, like its predecessor, seems intent to keep the focus on “aggressive tax avoidance” and raise funds by closing apparent loopholes in the tax law. Victoria has been boring her colleagues (and clients?) for quite a while now pointing out that tax avoidance is legal, and that if a government does not like what is happening, then they should write better tax legislation – and make sure that the legislation does indeed do “what it says on the tin.” “But when the Finance Act is debated for a mere afternoon before being passed into law – as happened in March 2015 – how can this realistically happen?” finishes Victoria.
Again, watch this space as we see what happens!
Comments are those of Victoria Bishop and do not necessarily reflect the views of robinson+co.