As well as the usual enhancement of anti-avoidance legislation, the Chancellor announced on 9 October 2007 a major overhaul in the Capital Gains Tax regime and ´improvements´ to the Inheritance Tax regime – which may not be as beneficial as they first seem.

This Pre-Budget Report will affect a large number of people. Over the next few months, as a matter of course, we will be reviewing all our clients´ affairs to ascertain how the Pre-Budget Report has affected them and provide them with pro-active planning advice.

Please be aware that these changes could be amended before becoming law and therefore advice is essential prior to any action being taken.

Please get in touch with your usual contact whatever your circumstances, to confirm whether or not the proposed amendments will affect you.

If you are not a client of LB Group then please contact: Andy Buchanan who will be pleased to discuss your personal circumstances and advise you of your planning options.

Capital Gains Tax reform and Inheritance Tax changes

If you can answer YES to any of the following questions, you will be affected by the pre-budget report;

Capital Gains Tax

• Do you own any assets (including share portfolio´s), which were purchased before April 1998?

• Are you an unincorporated business (self-employed/partnership?)

• Do you own commercial, or residential investment property?

• Exit-planning – do you intend to sell/gift the shares in your own company in the short to medium term?

• Are you an employee who owns shares in the company you work for?

• Do you hold, or are you about to receive, non-qualifying corporate bonds (loan notes)

• Does your Will leave assets to your Children but ideally you would want them to go to your spouse?

• Does your Will make provision for a nil rate band discretionary trust?

• Are you married/in a civil partnership and your joint estate is worth more than £600,000?

Other Pre-Budget Report Announcements

Personal tax

Income shifting – changes following the Arctic Systems tax case

Residence & Domicile – far reaching changes in the way UK residence is calculated and changes in the way Non-Domiciles are taxed

Car fuel benefit – increase in the taxable amount Self-assessment – changes to the criteria for payments on account and the way in which self-employed persons turnover and expenses are reported

Corporation tax

Sale and leaseback – amendments to the allowable deduction calculations

Life insurance – changes to the corporate treatment of life insurance properties

Other matters

Stamp duty – changes to the de-minimus levels for chargeability

National Insurance – the abolition of the Holiday Pay Scheme

Pension Schemes – changes to the way pension scheme transfers are treated