Newsletter Spring 2006

Spring 2006 Newsletter

Content

U-Turns Galore

Premises, Promises

Filing Bonus

RIP: 0% Rate

His and Hers

Party Spirit

State Of The Union

VAT's The Point?

Going Dutch

Away Win For Revenue

WIP-Round

The Best Land Plans

Tax Free Gizmos

Where Theres A Will

Do You Work Here?

Out Of The Shadows

Sacrifice Works

Home Sweet Office

Sauce For The Goose

Blissful Ignorance

PC Or Not PC?

Lost On Penalties

Worth The Paper

Carry The Can

Premises, Promises

Gordon Brown created quite a storm - well, in financial circles at least - with announcements about the new pensions rules in the Pre-Budget Report. We have known for a couple of years that there will be big changes on 6 April 2006 - "A-Day" - but the details of the rules have still not been finalised. The Government had led everyone to believe that tax-advantaged pension funds would be able to invest in residential property - buy-to-lets and holiday homes - and there was a great deal of excitement about this. Many people had already set up arrangements to take advantage of the new rules at the earliest possible moment.

Then the Chancellor appears to have got cold feet. He must have seen the warnings about the effect of pouring a healthy dose of tax relief into the residential property market - inflation, explosion, catastrophe. Sometimes ministers find it too embarrassing to break promises - it's easier to carry on towards the iceberg and abandon ship for some other poor sap to carry the can. In this case, even though he hopes that someone else will be Chancellor soon, Mr Brown clearly decided the issue was too important. So residential property will be subject to heavy tax charges if it is included in an approved pension fund after A-Day. This is curious - it won't be forbidden, but it will have tax disadvantages rather than tax advantages.

What all the rumpus about residential property may have obscured is that the rules are still changing fundamentally from 6 April 2006, and almost everyone with a pension fund will be affected to a greater or lesser extent. The pension companies are sending out reams of information which may or may not help. If you want to discuss what the changes mean to you in practical terms, we will be happy to help.