What the 2017 Budget didn't say…
Compared to recent years, Mr Hammond's Budget of November 2017 could be described as relatively benign, particularly given the relatively low impact it is likely to have on most households. But sometimes it is the unsaid that is more telling and we look at what might lie ahead in 2018.
In March 2017 the Government announced that they would be introducing a staggered tier system for Probate fees. Estates worth in excess of £2million would have been expected to pay £20,000 in fees just to obtain a Grant of Probate or Letters of Administration. Not only was this proposed fee excessive, but it would have caused great difficulty for Executors, who would have had to come up with the funds before they had the power to access the deceased's bank accounts.
However, there was a swift U-turn in the policy due to an overwhelming opposition from Probate practitioners and public outcry. The intervening election also helped as the Government thought about how they could increase their popularity.
As such, the Probate Registry fees remain at £215 as a flat fee if Probate is applied for by friends or family, or £155 if a solicitor completes the process.
This is an area that Mr Hammond has threatened to keep an eye on and we could see the reappearance of this fee scale in the future in some guise- although we do appear to be safe for the moment.
The legislation relating to the tax treatment of non-domiciles was also subject to a policy U-turn earlier this year.
The changes introduced in the Finance Bill mean that, amongst other things, the number of years one can be resident in the UK and avoid being "deemed domiciled" here are reduced to 15 out of the last 17 years and broaden the exposure to UK tax where offshore trust contain UK residential property and for people returning to the UK if they were born here.
The legislation was pulled at the eleventh hour and many non-domiciles were left in limbo. The Government then advised that the tax changes would apply retrospectively to April 2017 but there was very little indication given as to when the Bill might actually be ratified.
However, on 16 November the Finance (No.2) Act 2017 received Royal Assent and was enacted. This was not referenced in the Budget and no further mention of the taxation of non-domiciles or offshore trusts was made, despite the recent "Paradise Papers" debacle.
Although there appears to be radio silence for the time being, HM Revenue & Customs certainly has tax avoidance schemes firmly in their sight and it would not be surprising if a further tightening of the tax remit was introduced over the next year.
Stamp Duty Land Tax ("SDLT")
The introduction of the additional 3% charge in the March 2016 Budget has had a big impact on the housing market and has caught many unsuspecting purchasers – be this parents helping their children or couples looking to move in together for the first time.
The Budget didn't dwell on SDLT increases this time round but has made some minor amendments as to how the existing rules should be applied, in particular shutting off any loopholes in relation to transfers between spouses/ civil partners.
However, to finish on a positive, there was good news for those looking to make the giant leap onto the property ladder.
Provided that all parties are first time buyers, and that the property in question is being purchased for less than £500,000, they will benefit from not having to pay any SDLT on the first £300,000. This could mean a reduction of up to £5,000 in SDLT charges for some. This policy is effective immediately from 22 November 2017. How long this tax break will remain available is yet to be confirmed so, if you are thinking of buying, don't delay! For further information on the SDLT relief, please see our previous blog on what the Budget means for private clients.