The Pre-Budget Report

After the upheaval in the IHT rules governing trusts which erupted from the 2006 Budget, probate and trust practitioners must feel relieved that the Chancellor did not seem to have singled them out for special treatment in his Pre-Budget Report on 6 December. It would of course be unwise for trustees, personal representatives and their advisers to assume that the Treasury and Revenue websites contain nothing of interest to them. Many trust funds hold land. Trustees were, after all, originally invented in the Middle Ages as a means of holding land in such a way as to escape some of the hazards of the feudal system. It is clear from the Consultation on paying the Planning Gains Supplement, and the published paper on Valuations for the Planning Gains Supplement, coupled with the publication of the Barker Report on the Planning System, that the Planning Gains Supplement is likely to happen. Unlike previous attempts to tax development value, this will be levied on the developer carrying out the development rather than the landowner selling land for development. One of the present difficulties, with the present state of the Government paperwork, is the lack of detail – especially where numbers are concerned. It is said, for example, that the rate will be ‘modest’, but no figure is given. There is also uncertainty on (to) the extent of exemptions for minor home improvements, something which may directly concern trustees of houses purchased for beneficiaries to live in.