MacIntyre Hudson said that while in his forthcoming Pre-Budget Report Brown is likely to announce green tax measures, he is unlikely to alter stamp duty or relax the inheritance tax (IHT) regime.
Shadow Chancellor George Osbourne has floated the idea of removing the 0.5 per cent stamp duty tax on share purchases. Clara Furse, the chief executive of the London Stock Exchange, has also requested that the Chancellor consider the idea, arguing that it would significantly increase economic activity. However, Mr Brown and Ed Balls, Labour’s City minister, have been lukewarm to such proposals.
Nigel May, tax principal at MacIntyre Hudson, commented: “Many have found the tax on documentation in a market where transactions are now paperless extremely anachronistic. The 0.5 per cent charge is not a large disincentive to trade, however, and the Chancellor will feel that his relationship with the City is not yet sour enough to countenance such a loss of revenue. He and Ed Balls are likely to continue their ongoing charm offensive on top senior City figures instead.”
May added: "The Chancellor may have recently expressed his antipathy towards some green taxes, but this Pre-Budget report is a juicy opportunity to score some points with green voters. Likely measures include unfreezing of the fuel duty escalator and additional bands of Vehicle Excise Duty to tackle the worst polluters. As a money spinner, Brown is sure to tighten his grasp on schemes that can be used to circumvent inheritance tax, reinforcing his message that there will be no escape from the dreaded death tax net.”
MacIntyre Hudson believes that, despite the disquiet over the tax, the Chancellor will instead focus on measures to restrict reliefs and curb avoidance.
