Budgets to those interested in tax are a bit like Christmas to those interested in presents. There is always an element of excitement and trepidation about what “presents” the Chancellor might deliver. This year was no different and indeed given the pandemic the expectations were for significant tax changes. However there were no unexpected surprises for the private taxpayer. There then followed the anticipation of “tax day” on which we expected to receive a significantly more detail on the direction of travel for Capital Gains Tax and Inheritance Tax. Again tax day was a damp squib. Most disappointing! All that was announced was that the Government acknowledged receipt of the Office of Tax Simplification’s reports on Inheritance Tax. The Government acknowledged the first report from the OTS looking at the administration of Inheritance Tax and indicated that they were going to make changes to ensure that fewer Inheritance Tax Returns had to be lodged, particularly where there is no Inheritance Tax payable. They also indicated that they were still considering the second report on the more complex technical aspects of Inheritance Tax and would respond “in due course”. Given that their first response had taken more than two years “in due course” seems to indicate that nobody should be holding their breath waiting for changes to Inheritance Tax and Capital Gains Tax. Time will however tell.
At the moment therefore we can continue as we are using the current legislation, allowances and reliefs. The one cloud on the horizon for most taxpayers will be the consultation on making the payment of Income Tax and Capital Gains Tax earlier in each tax year from 2023 which potentially will have a significant impact on those who do not pay under the PAYE Scheme but we await more details.
If you need advice on tax issues, please get in touch.