By Clare Munro, tax partner
A week on from an election result which was as surprising as it was memorable, those of us with a professional interest in the tax system are waiting for the new Conservative government to make the first moves. There have been comments from Labour and others that the Tories' victory was based on fear but a more realistic assessment seems to be a vote for continuity - more of the same please!
If the country wanted stability we were promised much else besides, and Cameron's new administration now has to deliver on the many election pledges made during the long campaign if it is to retain credibility. Looking back at those pledges, what therefore can we expect in the way of tax changes?
Owners of high value property can now smile at having escaped a mansion tax but the December 2014 SDLT changes will ensure that the cost of moving between such properties goes up significantly.
Non-doms will keep their favoured remittance basis tax status for now but, depending on the outcome of the consultation process, may be forced to elect into the remittance basis for three years at a time which should increase the take.
The IHT nil rate band is to be expanded within two years to give an IHT equivalent to the CGT main residence relief for homes up to £1m in value. This should take the vast majority of family homes out of the IHT net and considerably reduce the IHT take for the Exchequer.
At the lower end of the income scale the Conservatives promised to raise the tax threshold to pull full time workers on a minimum wage out of the tax net altogether at a cost of some £4bn a year, according to the IFS. And raising the bar for 40% tax to £50k will ensure that around 1.5 million middle-income workers avoid paying more than basic rate by 2020.
However, the largesse on income tax begs the question of how the spending plans for the NHS, schools infrastructure and pensions will be funded. Like the other parties, the Conservative manifesto pointed to crackdowns on tax avoidance and evasion as a source of funding.
It's an easy mantra to run in an election campaign but, given that many of the 'low-hanging fruit' will have already been plucked, it's probably more difficult to turn into ready cash. Add to this the self-imposed 'triple lock' on VAT, income tax & NICs and it's clear that this government has its work cut out.
If you would like to discuss any of these issues, or speak more generally about how our tax team could assist you with UK or international tax advice, please email me or call on 020 7490 7766.