With the snap General Election confirmed as being on 8 June arguably a few of the most controversial planned changes to legislation have fallen.
The first to go was the planned increase in fees associated in the process of applying for probate.
It was planned that current fees of £155 for a solicitor, or £215 for everybody else, would be based on the value of the estate, with potentially the fee increasing to a maximum of £20,000.
This was seen by many as a tax on the wealthiest estates and despite many objections at the consultation stage, was planned to be implemented in May 2017.
Finance Bill changes
The Treasury has now joined in by making some noticeable changes to the Finance Bill, many of which had only been confirmed following the Chancellor’s Spring Budget on 8 March 2017.
Money Purchase Annual Allowance (MPAA)
As we have previously confirmed, the MPAA was due to reduce from £10,000 to £4,000 per annum from 6 April 2017, however this has now been delayed.
This planned reduction would further limit the pension contributions for those who have flexibly accessed benefits and was to be implemented despite strong objections in a previous consultation.
Tax-free dividend allowance
Also on hold is the intended reduction in the tax-free dividend allowance, from 6 April 2018. The reduction in this allowance, from £5,000 to £2,000, was cited by the Chancellor as an attempt to remove some of the tax advantages of the self-employed incorporating, however interestingly was not directed at just one or two person companies, but everyone.
IHT & deemed domiciles
A further change due to come into force on 6 April 2017, and now put on hold, was a reduction in the period of time someone needs to be living in the UK before they become deemed domicile for tax purposes. The current period of 17 out of 20 years remains, with the reduction to 15 out of 20 years delayed.
Also on hold is the removal of an exemption for UK Inheritance Tax for any non-UK domicile who has purchased property in the UK through an overseas corporate structure (commonly known as enveloped dwellings).
£1,500 tax-free pension advice allowance
Also due to come into force on 6 April 2017, and now delayed, is the ability for individuals in occupational schemes to withdraw up to £1,500 from their pension pots tax-free to pay for financial advice. The intention was that up to a maximum of £500 in a tax year could be utilised to allow individuals to obtain retirement advice, tax-free, at different stages of their lives.
The plan to ban pension cold calling, as detailed in a previous news item, is unfortunately another legislative change that has been put on hold. With most scams, offering high guaranteed investment returns or offering free investment advice or pension reviews, beginning with a cold call this is disappointing news.
Whether or not any of these changes are ever made in the future will presumably depend on the result of the election. Whether a returning Conservative government would look to implement the changes they previously proposed and potentially back date the changes for those due to commence on 6 April 2017, particularly in regards to the MPAA reduction, is up for debate.
We will continue to provide updates on the website, and our Facebook and Twitter accounts, on the legislative and market changes prior to the General Election on 8 June.
As always, should you have any particularly queries please speak to your usual contact.
This article is based on our understanding and interpretation of the recent Government announcements and is subject to change. It does not constitute nor is to be construed as advice.
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