The Early Election Halts Elements of the Finance Bill
With an election being called for the 8th June and parliament dissolving on the 3rd May the decision was taken to scrap some elements of the Finance Bill; as there would not be enough time to get the bill in its entirety to the statue book.
We were particularly happy to see that the proposed new probate fee structure was included in the fallen proposals and hope to see a better solution in the next parliament. One of our own advisers, Robin Barnett, had written to our St Albans MP Mrs Anne Main to express his dismay at the ‘arbitrary and disproportionate increases’. We were incredibly pleased to receive a reply from Mrs Main this week expressing her commitment to this issue.
Other aspects of the finance bill which have been shelved include:
Reduced Money Purchase Annual Allowance (MPAA)
It had been proposed that the money purchase annual allowance was going to be cut from £10,000 to £4,000 which would have affected individuals who have, under the new pension flexibilities, accessed their defined contribution pension and were planning to continue making payments to their pensions.
Deemed Domicile Rule Changes
The number of years that nom-doms can be resident in the UK before they were classed as domicile was to be reduced from 17 out of 20 tax years to 15, with regards to inheritance tax.
Recalculation of Disproportionate Bond Gains
HMRC had planned from April 2017 to allow gains that were completely disproportionate to the investment performance to be recalculated on a reasonable basis; typically, when in excess of 5% of the allowance was made at the beginning of the policy.
This is not a party-political measure and we hope it will be reintroduced after the election.
Dividend Allowance Cut
The Finance Bill was due to cut the annual divided allowance from £5,000 to £2,000 in 2018, this would have hit small and medium sized business owners who take their profits as a dividend.
These changes are expected to be reconsidered after the general election when a new parliament commences and the new government present their first finance bill.
If you would like to discuss any of the changes made to the Finance Bill then please get in touch with one of our independent financial advisers:
T: 01727 85 22 99 | E: mail@kdw.co.uk | www.kdw.co.uk