A.W.BECKINSALE & CO.

SPRING BUDGET 1998

Gordon Brown's first Budget in July 1997 was necessarily limited in scope, putting in place the 'windfall tax' and a few other measures which could be devised only a few weeks after the election.  This was his first opportunity to make major changes - and in the space of a relatively short speech, several fundamental reforms were announced.

This Chancellor has been more open about the likely contents of his budget than his predecessors. The 'Pre-Budget' in November outlined many proposals, some of which are confirmed (such as a major reform of Capital Gains Tax); others have been altered after representations (such as the new 'Individual Savings Accounts' and the status of existing PEPs and TESSAs, and the new system for paying Corporation Tax).

There is more to digest and more to deal with than for many years. Because the speech has returned to its traditional March date, much of it comes into force in less that three weeks - although anything regarded by the Chancellor as a 'loophole' has been closed down with immediate effect.

SIGNIFICANT POINTS

• Fundamental reform of Capital Gains Tax, 'tapering' for long-term gains
• Existing PEPs and TESSAs allowed to continue independently of new Individual Savings Account
• End of 'bed and breakfast' deals for Capital Gains Tax
• Rise in Stamp Duty for property over £250,000
• No change to Inheritance Tax treatment of lifetime gifts
• Only minor changes to taxation of employees
• Harsher Capital Gains Tax regime for many UK and offshore trusts

AUTHORISED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS IN ENGLAND AND WALES TO CARRY ON INVESTMENT BUSINESS