future changes in store?

One crafty way for the Chancellor to bring in extra tax revenue without raising headline tax rates in a future Budget or Spring Statement would be to limit some of the generous tax breaks that are currently available.

The Chancellor may therefore consider some of the measures suggested by the Treasury Select Committee, or the Office of Tax Simplification (OTS) last year.

The Treasury Select Committee specifically drew attention to the cost of pension tax relief (£41 billion in 2019) and CGT private residence relief (£25 billion) so we can perhaps expect further restrictions to those reliefs.

The OTS have carried out a detailed review of both CGT and IHT, so we anticipate changes to those taxes to bring in extra revenue.

Something to listen out for is a possible change to the CGT rules when assets are transferred on death. Currently assets such as the family home or the family business are transferred at market value at the date of death without CGT being payable.

It has been suggested that instead of market value the assets are transferred at the deceased’s base cost, which might be just £100 in the case of shares in the family company. Although there would be no CGT payable at the time the effect would be to create a large potential CGT bill for the next generation.