"Business will be pleased with this Budget, which does not raise significant new tax or increase complexity. There are some anti-avoidance measures, most of which close small loopholes in previous anti-avoidance legislation and which are budgeted to raise £135 million in 2006-07. Some Stamp Duty Land Tax saving schemes are to be closed and the seeding relief (a relief on property transferred into a unit trust) is to be abolished, following its use in unintended circumstances. The property industry had suspected this for some time.
"REITs will be introduced from 1 January 2007 and the conversion charge is 2% of the market value of the properties concerned.
"The Government has decided to take a minimalist approach on changes to loss relief, following the Marks & Spencer case. The relief will apply only to losses incurred by EU/EEA subsidiaries of UK companies, where such losses cannot be used elsewhere. Full details will only be available when draft clauses are released in the Finance Bill. Companies will of course welcome the fact that there are no changes to the normal UK group relief rules.
"There is an emphasis on simplification, where HMRC aims to reduce the administrative burden by 10% over 5 years. Online filing, both by companies and by individuals will be pushed forward and the long-awaited Carter Report is published today.
"There is some unwelcome news on Trust reform, where useful and hitherto uncontroversial reliefs are to be abolished."
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