{"id":2474,"date":"2007-10-09T17:18:12","date_gmt":"2007-10-09T17:18:12","guid":{"rendered":"https:\/\/mmm.9dotdigital.ca\/?p=2474"},"modified":"2025-03-27T15:48:31","modified_gmt":"2025-03-27T15:48:31","slug":"uk-pre-budget-report-initial-impressions","status":"publish","type":"post","link":"https:\/\/mmm.9dotdigital.ca\/?p=2474","title":{"rendered":"UK Pre-Budget Report: initial impressions"},"content":{"rendered":"<p>The <a href=\"http:\/\/www.hm-treasury.gov.uk\/pbr_csr\/report\/pbr_csr07_repindex.cfm\" target=\"_blank\">Pre-Budget Report<\/a> looks insignificant in macroeconomic terms but may deliver short-term political gains, with measures to gather extra revenues from the private equity industry and non-domiciles used to fund a new low capital gains tax rate of 18% and transferable inheritance tax allowances for couples. <\/p>\n<p>As already leaked, the Treasury has revised down its GDP growth forecast for 2008 from 2.5-3.0% to 2.0-2.5%. This forced the Chancellor to push back projected improvement in the public finances but the current budget still miraculously returns to surplus in 2009-10. Risks remain high though: the forecast depends on an optimistic-looking growth rebound in 2009 as well as adherence to restrictive public spending plans and a further rise in the revenue share of GDP. <\/p>\n<p>The centre-piece of the Report was capital gains tax reform, which is projected to raise &pound;900 million per annum by 2010-11 &ndash; the abolition of taper relief enjoyed by private equity firms and other holders of &ldquo;business assets&rdquo; more than offsets the cost of lowering the headline rate to 18%. The Chancellor plans to use this cash together with an extra &pound;500 million to be garnered from &ldquo;non-doms&rdquo; to fund an effective increase in inheritance tax allowances for couples to &pound;600,000, costed at &pound;1.4 billion by 2010-11. <\/p>\n<p>The capital gains tax changes represent a welcome simplification although there is a risk that some private equity activity will now shift offshore. The main criticism of its Report is its failure to provide a fiscal cushion against unforeseen economic deterioration. With an election delayed until 2009 or 2010, there was a case for tightening fiscal policy now to allow more room for manoeuvre nearer polling day. Politically astute? Time will tell. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Pre-Budget Report looks insignificant in macroeconomic terms but may deliver short-term political gains, with measures to gather extra revenues from the private equity industry and non-domiciles used to fund a new low capital gains tax rate of 18% and transferable inheritance tax allowances for couples. As already leaked, the Treasury has revised down its [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-2474","post","type-post","status-publish","format-standard","hentry","category-money-moves-markets"],"_links":{"self":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2474","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2474"}],"version-history":[{"count":1,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2474\/revisions"}],"predecessor-version":[{"id":4783,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2474\/revisions\/4783"}],"wp:attachment":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2474"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2474"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2474"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}