warrenm2

Smiler Brown does it again, on one hand appearing to give money to people, in this case raising the threshold for IHT, as more and more people are being trapped by it through his famous fiscal drag, then slyly slips in a extra tax on trust funds in the small print. And makes it retrospective!

Same as with contractors with IR35 a few years ago and now hes attacking umbrella companies as well. The little f****** ****** c***!!!!

http://www.timesonline.co.uk/article...099457,00.html

Sbradley

Unbe****inglievable.

The man truly is a ****** of epic proportions.

SB

Sbradley

He's also removed the tax break on company PC loans to staff. So if you need a PC at home now you'll have to buy it yourself as if your company supplies it (even on loan and even if you have to pay for it) it gets treated as a taxable benefit and they have to pay NIC and get the machine treated as a taxable asset.

Way to go, Gordon.

Oh, and the reason? Because the Governmen't home computing initiative is targeted at the unemployed and the elderly. So if you're not on benefits you can't play...

SB

MattW

Bad news about Trusts, something our family took advantage of when my grandparents passed away.

TopBanana

How can he make it retrospective? So 20% of all money already paid into these trusts will be due?

HankScorpio

Are you sure about that?
I and several hundred other people I work with have recently bought one under the HCI and the scheme is administered by the firm and payments deducted at source thereby paying no tax and NI on them.

Floyd

iTrader: (9)

I think the economy is in the best condition for years now and he's doing a good job. Why shouldn't the better off pay a bit more? You are all greedy bu66ers with no social conscience!

F

ChrisB

The Beeb's analysis by somebody from the Chartered Institute of Taxation says:

HankScorpio

The budget point may be correct but to say the HCI is aimed at the unemployed and elderly is incorrect.

fast bloke

The 10 year 6% asset tax and the 6% exit tax will probably be retrospective - IE - It will apply to existing trusts

OllyK

Is there not a subtle difference here where you can get a computer for home - tax free but you pay the rest, compared to compaines that buy a PC and then allow their employees to use them at home with no charge. I suspect my work laptop which I can take home may fall under that, but that the laptop I bought through the HCI would be OK. If my work laptop is affected, it'll stay in my drawer at work, and I'll install the VPN software on my desktop at home.

HankScorpio

How do HCI schemes enable employers to loan computing equipment to employees for personal use in the home?

* Home Computing Initiatives are made possible by the £500 annual tax exemption on loaned computers introduced by the Chancellor in 1999. The exemption enables companies to loan computers to their employees as a tax free benefit.

* Once the loan period is over, the employer/leasing company may sell the computing equipment for a nominal price - likely to be a small fraction of the original value. It may be that the employee is given the option to purchase the equipment, but this must not be referred to in either the hire agreement or any other documentation associated with the scheme as it would constitute a Hire Purchase Agreement rather than a Hire Agreement.

Tiggs

everyone moans about IHT yet how many bother to write their Wills properly??? or use IHT effceint investments??

its VERY rare that i meet a client with a Will that will use both nil bands properly....if everyone did this IHT would halve overnight and the amount of people i see over 70 who hold loads in PEPS and ISAS....which is as good as 40% tax defered....never fails to amaze how so many can moan yet do so little about it.

lozgti

I have no social conscience whatsoever.All benefits should be stopped immediately.Especially the £35 a week failed asylum seekers get.

Gordon Brown is a fool(allegedly,having read the other thread).Just waiting for a meltdown.Shouldn't be too far off

Tiggs

also...worth pointing out the new rate is £10k up......seems a lot of websites are suggesting its up £50k to £325 which is the 09/10 figures, not this year.

Bluie

New rules will apply from 22 March 2006 regarding the inheritance tax treatment of Accumulation and Maintenance (A&M) trusts and interest in possession (IIP) trusts. The rules align the inheritance tax treatment of the majority of such trusts with the treatment of discretionary trusts. There are transitional rules for trusts already in existence at that date.

An A&M trust is one whose purpose is to benefit children and/or grandchildren of the settlor. The income of the trust maybe accumulated annually or payments out made for the education/maintenance of the beneficiary. The beneficiary has a right to receive the income of the trust at the age of 25 at the latest.

An IIP trust is one where specified individual(s) have a fixed entitlement (often called a life interest or interest in possession) to the income of the trust.

New A&M and IIP trusts set up from 22 March 2006, and additions to existing trusts, will incur an immediate 20% inheritance tax charge to the extent that the value of the property put into the trusts exceeds the nil rate band (currently £275,000).

There will be a maximum 6% inheritance tax charge on the value of the trust every ten years following the date of creation of the trust.

Assets removed from such trusts will incur an inheritance tax charge proportionate to the inheritance tax rate applicable at the time of the last 10 year tax charge.

The above rules will not apply in the following circumstances:
trusts created on the death of a parent for their minor children, who become absolutely entitled to the assets of the trust at 18
trusts created for disabled persons
trusts created on death for the benefit of one person who has a life interest and whose interest cannot be replaced.

Tiggs

biggest effect of the above is the penalising of those who state 21 or 25 as being the age when children are able to inherit from parents estates.

let them have it at 18 and the waste it.....leave it in trust till 25 and pay more tax!

J4CKO

iTrader: (1)

Can you still 'gift' money/houses with the diminishing tax liability over 7 years ?

Tiggs

yes.....but dont forget the diminishing liability only takes effect if the gift value exceeds the nil band - not many give away £275k

hades

I thought the gift (with diminishing liability if appropriate) contributed to the total value of the estate, so that IHT is relevant if the gift takes the total over £275k? I'm not the expert here, so quite prepared to be put right!

hades

The economy appears to be in good condition in large part due to the huge amount of government borrowing susbisidising it. Take that away, or wait for the interest charges to mount, it might not look so clever.

Tiggs

in very simple terms.....

example 1 - your dead, your estate has £275k before tax so if your estate is £500k you have 225k too much at 40% = £lots of tax

example 2 - if you gift 100k......then die, your nil band of £275k is lowered by gifts in last 7 years.....so thats 100k off the 275K.....you now have 175k of nil band allowance left so no tax yet....but if the remaining estate is now 400k (as you gifted 100k) only 175k is within the allowance so you have £225k at 40%.......NO CHANGE to example 1 - had you lived 7 years the gift would be ignored....but you didnt

example 3 - you gift 400k...........you die in 5 years. the nil band is still £275 (it will rise but lets ignore that).......your nil band only covers 275k of gifts in last 7 years..so your GIFT has £125k OVER the limit.....that £125k is TAXED for IHT...but that tax tapers. now the rest of your esate is only 100k as you gifted £400k which we have just dealt with.......but your nil band is all used on the gift so ALL of the £100k is taxed at 40%.

so......unless the gift is over the nil band...taper is a red herring, just live 7 years.

whats fun is when one kid is gifted his inheritace early and the other kid gets his via the will......and finds the value of the gift to his sibling has wiped out the nil band and now his inheritance is tax more heavily - all very exciting...sort of.

speedking

Well said Tiggs #15. The increase in IHT is barely more than index linking it Hardly worth mentoning.

r32

This a joke?

Floyd

iTrader: (9)

I agree that specialist care (nursing homes) should be taken from house equity when the old don't have enough money. Why should the old take a huge chunk of money from the NHS that could be spent on the young?

F

speedking

Because the old have been paying NI contributions all their lives on the basis that they will get 'free' health care. The young have contributed very little.

Why should those who have the good sense to save and buy their own property subsidise those who buy shiny new things every year, go on 3 holidays a year, subscribe to Sky, always have the latest phone, etc. and end up with nothing to show for it?

ricardo_wrx

I think a revolution is in order............ what are those lyrics from the prodigy tune their law?????

Cupramax

I totally DISagree... Why should they have to use their savings when they've paid NI all there lives?...having seen this exact situation devastate my parents as one has had to go into a nursing home recently due to dementia, the embarasment of having all their finances churned through by people they dont know. These are people who fought for this countries freedom in the second world war and paid their NI since they left school. When this country throws money at immigrants it makes me seeth to see them going through this.

Leslie

I agree with all that Cupramax.

Les

Cupramax

Thanks Les... in my opinion this country and Tony baloney has its finger in too many external pies rather than sorting its own out first. Pity they dont favour their own rather than the bottonless pit of waste that is Iraq.