In this section we will summarize the pre-budget report of UKfor 2007 as delivered by the British chancellor. The changes mainly affected the inheritance and the capital gains tax. Many changes were made in taxation for the non-resident and as well as the non-domiciled citizens.
On the 9th of October 2007, the Pre budget report was shared by the British chancellor. The report told about some possible changes in individual taxation with regards to the inheritance tax and capital gains tax The report stated that those changes would be effective from the 6th of April 2008.
The changes with respect to inheritance and capital gains tax include:
The British government declared that it will nullify several capital gains tax exemptions that were in effect for individuals, personal representatives and trustees. It will replace those tax reliefs with a new capital gains tax of flat rate of 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 ongoing nil rate band for the inheritance tax.
The government introduced some measures to tighten the tax rules for UK based non-domiciled persons. It might also increase the amount of tax imposed, 30,000 pounds on the individuals after residing in the United Kingdom for ten years.
People had been able to remit their foreign income and profits to the country without paying tax. The existing loopholes would be closed thereby correcting this problem.
A new system of counting days would be introduced for the purpose of taxation, in which 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.