The impact of the PBR
5:53pmBy Fraser Nelson
• Buy-to-let bonanza: Previously, if you sold a buy-to-let house you’d pay between 24% and 40% on the capital gains. Now it’s 18%. Great news, which may help housing market liquidity.• Welfare: Might Brown be aping Cameron on welfare reform as well? The CSR balances by assuming a fairly heroic 5% annual reduction in the UK welfare bill until 2010-11. I’m all in favour of this, but it’s an ambitious undertaking.
• More aping Osborne: The Tories proposed a £25,000 charge on non-doms. Brown will introduce a £30,000 charge – but after they have been non doms for seven years. NB, this is just a proposal and there will be a consultation. So the removal vans might not be needed just yet.
• Defence: lowest-ever share of the cake. As I suspected, defence spending falls as a share of government departmental spending – from 9.5% now to 9.3% in 2011-12. This, as far as I am aware, is the lowest in modern British history. When Labour took power it was 12.4%.• The Whitehall Winners and losers: With average spending up 2.1% a year, which departments are above and below the average? The winners are: International development (11%) Health (3.1%) Transport (2.1%) schools (3.1%). And the losers: Transport (2.1%) Defence, Scotland (1.8%) Home Office (1.1%) and Foreign Office -0.1%
• Luck of the Irish: From now on, the Irish will be eligible for the benefits enjoyed by other non-doms.
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Tim Wettone
October 9th, 2007 7:29pm Report this commentThe big downside for small business owners is that, if you have worked to build your business and then sell it, you will in future pay 18% in capital gains tax instead of a maximum of 10% now. This change has been introduced to hit private equity firms, which it does, but it hits the small businesses even more, and they can least afford it!
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