Nimesh Shah, a partner in Blick Rothenberg's private client team does not anticipate any major announcements in the Chancellor's Spring Statement, however he shares his thoughts on what the Chancellor could do in respect of Entrepreneurs' Relief, Stamp Duty Land Tax, Inheritance Tax and more.
It is widely expected that there will not be any significant tax changes announced in the Spring Statement.
The Chancellor saw a record surplus in public finances in February, with £5.5bn more received than in the same period in the previous year. It is unlikely that the Chancellor would use the surplus for any major tax giveaways, and is likely to keep the funds in reserve as Brexit contingency fund.
However, if the Chancellor chose to give the economy a boost through tax cuts, it is likely that these would be aimed at helping private businesses.
Despite some (now dampening) calls to abolish or restrict Entrepreneurs’ Relief, the Chancellor could increase the lifetime limit to £15m.
There could also be a further reduction in corporation tax – this is confirmed to reduce to 17% from 1 April 2020, but the rate could drop to 15%.
Stamp Duty Land Tax is in urgent need of reform, but we do not expect any widespread changes will be announced. However, the Chancellor could announce a consultation on the future reform of the tax.
At every Budget or Spring Statement, there are rumours of changes to the pensions regime. Whilst no major changes are expected, there could be a consultation published on how the current pensions regime is merged with ISAs. This would mean the current upfront tax relief for pensions being scrapped completely, but monies could be accessed in the future tax-free.
A consultation is likely on the reform of Inheritance Tax ("IHT"), after the Chancellor approached the Office of Tax Simplification to review the current regime. The IHT regime is hugely outdated, with a number of the rates, allowances and exemptions unchanged for a number of years. With an ageing population, the Government has long been looking at IHT as a potential source of tax revenue, and widespread reform could serve to increase the tax-take.
For more information, please contact Nimesh Shah.
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