Summary of the taxation provisions
In his tenth and possibly his last Budget, Gordon Brown
focused on his spending plans, but the accompanying notes revealed
a range of important tax announcements. The tax regime for real
estate investment trusts - REITs - was finalised. Small companies
will benefit from an increased first year allowance for plant and
machinery. There will be an extension to research and development
tax credits.
The Chancellor also revealed that accumulation and
maintenance trusts and many interest in possession trusts would
be treated in the same way as discretionary trusts for inheritance
tax - with immediate effect. There are very few exemptions. Investment
in venture capital trusts will qualify for income tax relief of
30% for 2006/07 (down from 40%), and investors will need to hold
their shares for at least five years. Funds left over on death in
'alternatively secured pensions' for people over 75 will normally
be subject to inheritance tax.
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