Abstract:
In this paper we will summarize the Pre budget Report of UK for the financial year of 2007 delivered by the British Chancellor. The changes were mainly done with respect to the inheritance tax and capital gains tax. Lots of changes had also been made in the taxation for the non resident and as well as the non domiciled citizens.
The Pre budget Report of UK, 2007 had been administered by the British Chancellor on the 9th of October 2007. The report told about some possible changes in the process of individual taxation with respect to the inheritance tax and capital gains tax.
The government announced that those changes would be effective from the 6th of April 2008. The changes with respect to inheritance and capital gains tax are highlighted below.
The British government declared that it will annul several capital gains tax exemptions that were existing then for the individuals, personal representatives and trustees. It will replace those tax reliefs with a new capital gains tax of flat rate, 18%.
- The tax reliefs to be annulled included indexation relief, taper relief and couple of special reliefs that were imposed on assets possessed since March 1982.
- The government announced that a new legislation would be introduced to transfer the unused inheritance tax easily. The government wanted to stop the on going nil rate band for the inheritance tax.
- The government introduced some measures to tighten the tax rules for the UK based non-domiciled persons. It might also increase the amount of tax imposed, 30,000 pounds on the individuals after residing ten years in the United Kingdom.
- The existing loopholes would be closed by the British government for which the people were able to remit their foreign income and profits to the country without paying tax.
- The government would introduce a new system of counting days for the purpose of taxation, that is the number of days spent in UK would be counted in a new and systematic way. Previously, the days of arrival in and departure from England were not included in the day count tests.