As mentioned in previous posts, with a General Election this year there was always a likelihood that there would be both a second Budget and a second Finance Act during 2015. We know now that, not long after we have finished our strawberries and cream and put down our tennis racquets, we will have another Budget announcement on 8 July. This will be only the fourth budget speech to take place in the summer in the last 47 years.
In many ways this will look like a second Budget from the same Government, in that once again it will be George Osborne in charge on the day, but this is of course a majority Conservative Government, rather than a coalition, so perhaps this Budget will contain provisions that might have been put forward previously if the Liberal Democrats had not had a say in matters.
The second Finance Bill will almost certainly contain a number of measures which were announced in the last Budget, or in the Autumn statement, which were not included in the first Finance Act of the year because of lack of parliamentary time.
One measure that will be of particular interest to private clients, and to those advising them, will be the reform of the relevant property trust taxation rules. This was expected to be included in the first Finance Bill, especially given that the draft legislation provided for the changes to affect trust tax charges from 6 April 2015, but this was not the case. A commitment to bring forward the legislation at a later date was, however, expressed so it would seem a near certainty that this will make the statute book this time around. This will bring an end to the large Inheritance Tax (IHT) advantages previously enjoyed by multiple pilot trusts created on different days during lifetime and all funded at the same time on death.
It will be interesting to see whether we will have any more detail on the transferable main property IHT allowance which formed a major announcement during the election campaign. However, given that it was stated in the Conservative Party manifesto that this will not be introduced until 2017, this might await a later Finance Bill and perhaps a consultation on draft legislation. It would, however, be interesting to see the detail on this as we still take the view that this is a complicated way of reducing the IHT bill for families.