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Stonkingly good, Gideon. Never mind the 'rehearsals', every blow landed. Good job.

Inheritance Tax up to £600,000 for married couples? What if they do not die at exactly the same time(As is the likely senario)? Surely it would just revert back to £300,00. Is this a cut in Inheritance Tax? Sounds like a bit of smoke and mirrors to me.

Quick off the cuff response:
(1) The inheritance tax changes are a spoof which will bring no practical benefit. In effect Darling's abolished what we call a nil rate band trust for a surviving spouse - and if you leave everything to your spouse then there's no IHT anyway.

(2) Unclear on details, but it seems Darling's abolished taper relief for capital gains from next April (which is what produces the apparently notorious 10% rate which means investors pay less tax than their cleaners). That's a U-Turn on Gordon's great incentive to invest which he implemented when he first became Chancellor - the people who qualified for that 10% rate were employees holding shares in their employing company, who have now apparently suffered a tax hit on their share incentives. So much for people's capitalism and wider share ownership.

Some good jokes and a hint of bitterness from George.The most important line is 'after a decade of growth the budget should be in surplus not in deficit'. We should be kicking hell out of them for this.

Isn't the Darling proposal on IHT an inherently empty gesture, given that in most cases the married couple will own their principal asset - the matrimonial home - jointly, and as such it will pass from the deceased spouse to the survivor outside of the estate? Darling should not be allowed to get away with this. Let's hope Jeff Randall is on good form later this week when it comes to Friday's Telegraph column.

How does an inheritance tax allowance for couples work? Am I missing something?

Is this supporting marriage through the tax system?

£600,000 for married couples ?

Not sure how that works - I thought legally one person always dies before the other, so how can this apply to couples ?

Will the couples have to be married ?

What does this mean ?

Janet - you are probably right, although the devil as always will be in the detail but if so the only people who will benefit are the children of a tragic accident scenario. If it is that cynical we should absolutely crucify them for it.

IHT - couples? Smoke & mirrors. What about children?

Okay reading the comments other people added while I was typing - its clearer now.

Its yet more *spin* (with a silent p) !

Don't these people ever learn ?

Time for someone to email PM to make sure they run them out of town for this one !

As far as I'm aware the announcements would raise the threshold to £600k (and £700k by 2010) for inheritance from parents to children. Someone correct me if I'm wrong on this.

Disposible income will continue to shrink under Labour as the spend,spend,spend economy begins to grind to a halt and debt takes a major slice out of income. This Labour government would be in a debtors jail if such places still existed today.

New stealth tax number one:
Sounds like a new tax on small businesses

"the Government believes it is unfair for one person to arrange their affairs so that their income is diverted to a second person, subject to a lower tax rate, to obtain a tax advantage (income shifting)....The Government will be consulting, shortly after the Pre-Budget Report, on draft legislation to take effect from 2008-09 to address income shifting."
Income Shifting

Brown's smug look whilst he nicked our policies should be copied and sent to every one of our members, to incentivise them to campiagn and kick these b******s out.

New stealth tax number two:
National Insurance Contributions exemption for holiday pay:
"The exemption from National Insurance Contributions (NICs) of holiday pay paid via a third party is to be removed for all sectors outside the construction industry."

Thanks for all of these insights, William - they're brilliant!

That Mr Norton, no doubt, will be the govt changing the law after it lost the 660 split divis test case recently. As soon as it lost, it was obvious they'd change the rules!

New stealth tax number 3:
IHT extension on savings:

"Where appropriate, tax-relieved pension savings diverted into inheritance using scheme pensions and lifetime annuities will also be subject to inheritance tax (IHT). "

The Chancellor giveth and the Chancellor taketh away...

The increase in CGT from 10 to 18% will be very controversial - there will be a rush sell off before April by a lot of people, and AIM, which currently attracts this relief is likely to be marked down overall.

This is typical Labour - in seeking to catch Private Equity, they have taken the opportunity to sneak in a tax rise for many millions of shareholders, employees and entrepreneurs.

New stealth tax number three:
bit obscure this one - Darling's made a typical Brown manoeuvre, he's attacking corporation tax deductions for employers in connection with pension funding: "spreading" a tax deduction is a polite way of saying that current year tax liability increases.

"Legislation will be introduced in Finance Bill 2008 to ensure that the rules that spread tax relief for large employer pension contributions relative to their contribution in the previous year cannot be circumvented. "

Just what we needed - another blitheringly pointless complication for property transactions:

"Following on from action in 2006-07 on stamp duty land tax avoidance [=people selfishly keeping their own money], the Government will consult with interested parties later this year on how to extend the disclosure regime [=think up more ways of screwing money out of you plebs] to high value residential property transactions [=any house south of Watford]. Government will also consult with interested parties later this year on the practicalities of addressing the use of special purpose vehicles to reduce stamp duty land tax liability on high value residential property. [=but not that clever VAT wheeze the Labour Party pulled a few years back when we bought our new HQ]

The budget's being attacked on BBC 5 Live for attacking small businesses and strangling enterprise.

It gets better and better - coming to a street near you MORE TRAFFIC WARDENS with INCREASED POWERS OF ARREST

"To assist in the fight against VED evasion, the Government has today strengthened VED enforcement powers to include motorists driving unlicensed vehicles and parking in areas where enforcement is not currently permitted.
Therefore in addition to public roads, from 1 September 2008, VED enforcement will also cover vehicles parked in public places that are not intrinsically part of a private dwelling, where a Statutory Off Road Notification has not been made."

I haven't seen anything yet about extra policemen (real ones, not the plastic fakes) but that might be my ageing eyesight.

Grant Shapps doing a great job on Sky. Refusing to give snappy, unprepared answers and saying let's take a day or two to get into the small print of the doc where the truth lies hidden, while swatting Darling left and right for all the obvious stuff. Good day. Expert (who?) alongside him makes raises my Q about IHT and children. 'Not at all clear.'

It's laughable isn't it? They had no intention of doing anything on inheritance tax before George Osborne announced it in his conference speech. I doubt the public will have enjoyed the desperate attempt to try and steal the tories policy as much as Gordon Brown clearly did. As Nick Robinson said this was the first major economic statement from a new chancellor under a new Prime Minister, and what we got was a remarkably defensive statement , trying desperatly to head off the political advantage the tories had gained from their policies.

George gave a really excellent, punchy and suitably aggressive response.

I thought GO did very well. I've copied the provisions relating to IHT from the PBR and pasted them below..

5.76 The inheritance tax (IHT) spouse relief rules mean that there is no IHT paid on assets
passing between married couples or civil partners. Many people therefore leave all their
assets to their spouse or civil partner, and do not make use of their individual tax-free
allowance of £300,000. The Government will therefore make the IHT system fairer by ensuring
that if a person’s tax-free allowance is not used on their death, it can be transferred to their
surviving spouse or civil partner, enabling every married couple or civil partnership to
benefit from double the tax-free allowance – £600,000 this year – in addition to spouse relief.
5.77 Furthermore, to ensure that people who have lost a spouse or civil partner prior to
today can also benefit, the Government will extend this entitlement to the three million
existing widows, widowers and bereaved civil partners.
5.78 Following the announcement made at this year’s Budget and the changes announced
today, the IHT allowance will rise by April 2010 to £350,000 for individuals and £700,000 for
couples. In future years the Government will consider both house prices and retail price
inflation when setting the appropriate IHT allowance.

Andrew Woodman - I wouldn't worry, Brown's got until June 2009, then his political life is over.

The hypocrisy of Labour!

Last week they slated our tax propsals for inheritance tax, claiming it only affects 6% of the population. Now when questioned, they say they have been considering raising the threshold for some time. Unbelievable...

I have some of what Osborne is taking. Very sharp barbs, the one about 'followership' really hits home.

As for copying our policy, please, please more of that. This proxy government isn't the real deal. We are.

To echo and confirm other points.

The widowed spouse is not liable for IHT so why marriage has been chucked into the mix eludes me.

The beneficiaries of the estate upon the death of the remaining spouse are liable. Unless, it would seem, Darling implies that one should marry one's mother?

Don't agree with raising the IHT threshold (but I accept it was politically neccessary), or with the extra spending on the armed forces, but the rest is great stuff.

Brown is still in a very strong position.

Three things:

Keep an eye out for the statement announced for later this week on the response to Northern Rock.

The introduction of an 18% flat rate for CGT is remarkable, in two ways. First, because it eliminates the incentive to hold assets for a period that Brown boasted of. Second, because it takes down the standard rate of CGT to a remarkably low level. Since CGT exists mainly to protect the income tax base - preventing people from taking too much income in the form of capital gains rather than income - it will be interesting to see whether this leads (as the Treasury has previously said it feared when abolition of CGT was proposed) to widespread dislocation of employee remuneration into capital. Presumably many people are going to start receiving their bonuses in the form of share options, rather than cash.

Finally, this fall in CGT significantly reduces the relative attractiveness of primary dwellings as an investment, versus (say) shares. The consequences of this will be interesting to understand.

We Conservatives have all the right arguments on tax - and I am sure all the criticisms of Darling are spot on. And yet.. and yet. I was listening to this on the radio. Darling came accross as a normal person. George Osbourne on the other hand - on the radio- came across, to me at least, quite simply appallingly. He had this smug, braying , obnoxious tone in his response. Why can he not simply present his arguments and not seem so appallingly smug?

Here's a nice raft of footling drivel which will make it harder to run your company and could have a critical cost impact on borderline businesses:

"Action is being taken, effective from today, to counter attempts by some companies to get around the shares as debt rules, which apply to interest income disguised as a capital gain or tax nothing." [=The Inland Revenue know better than you do whether borrowing or capital is better for your business.]

"Action being taken, effective from today, will tackle avoidance schemes abusing the availability of interest relief through the payment of interest in advance." [=Forget all that sentimental rubbish about freedom of contract to agree payment terms with your bankers. After all, this Labour Govmt is going to try to rig the mortgage market so we might as well cock-up commercial debt too while we're at it.]

"Action is being taken.... counter avoidance involving the sale and finance leaseback of plant or machinery and attempts to exploit long funding leases to create a tax loss where there is little or no commercial loss." [=You mean you really thought you could decide for yourself the best way to buy your company's new equipment?]

I thought bequests to spouses was exempt of IHT until death? Has Darling stuck a limit on it now?

"income shifting tax"


I wonder if it catches Sarah Brown's use of her personal allowances by eg renting out that bachelor flat of her husband..remember all that a few days after Brown took over?

and on IHT, aren't ALL transfers to spouses exempt?

This is typical New Labour deceit. A big headline-grabber, with lots of complex, petty, restrictive rules behind.

One small give, and lots of takes.

Oh how I wish there was going to be an election to boot these crooks out.

What exactly is the point of the Labour party in the modern world?

Labour MP's may jeer at the Tories that they remain ahead in the polls, but why are those Labour activists and MP's who fought tooth and nail to get Lady Thatcher out of Downing Street in the 1980s now delight in her invitation to return?

Why are those activists and MP's who fought tooth and nail against Tory policies throughout their lifetime now admit that they have to nick them as quickly as possible?

Why are they happy to sit alongside Quentin Davies and Shaun Woodward despite having bitterly opposed them just a decade earlier?

It is because this Labour government no longer has any thoughts or principles or reasons to govern. They now govern merely for the sake of governing; they oppose the Tories for the sake of party loyalty and then adopt everything the Conservatives propose. Indeed, they're so shameless that they don't even try to pretend otherwise anymore.

We have a government-perhaps for the first time in history-who are in it solely for the power and prestige of being in government. THAT has got to be the number one reason why they deserve to lose power, and why people must see through them at the next election!

The IHT cut seems real to me (although watered down) and an incentive to marriage to boot! The headline policy from a Labour Chancellor's first PBR is a Conservative policy in more ways than one. Alistair Darling must be wondering why he bothered joining the Labour Party...

In Gordon Brown's government of "all the talents" he lets the Shadow Cancellor write the budget!

An expert on 5live mentioned a "triple whammy" for small businesses. I can't remember the last one off the top of my head but increasing CGT impacts on a small business if it's sold, business rates are going up by about 2% (surprisingly that one wasn't re-announced)

We need to highlight the effect of this statement on small businesses and look into ways of helping entrepreneurs rather than penalising them

I think other people have referred to this in the long chain of correspondence above, but this IS NOT A CUT in inheritance tax.
It just allows couples to combine their allowances.

Anyone planning their IHT burdens sensibly today would be in precisely the same position before and after this announcement as they could ensure their wills left appropriate amounts to their children and didn't channel everything through their spouse.

Complete smoke and mirrors. Very irritating.

You don't agree with spending more money on our Armed Forces accommodation Comstock? My God! Are you really that heartless?

There must quite a bit of potential for us in this Capital Gains Tax change. It should be at the very least an embarassment for Brown, and perhaps a humiliation. I guess the government will want to emphasize the IHT change and hope the headlines focus on that. But what has happened on CGT is the total destruction of Brown's capital gains tax reform. Taper relief has gone - the government has decided, despite Brown's boasting, that it achieved nothing. The government has also decided that, despite its previous position, CGT did not need to be at 40% to protect the income tax threshold.

This is a straight, unambigious climbdown by Labour on an important issue. We should be nailing them on it.

As part of the Big Tent strategy, Gordon and Darling have hired Lewis Carroll to join the Treasury team:

"New fraud estimates released today show that attempted fraud fell by up to £1.5 billion in 2006-07. [What on earth is 'attempted fraud'? What they mean is 'our latest guess at what we don't know suggests that we don't know less than we first thought we didn't know', or at least I think that's what they mean] This follows the introduction of operational measures to strengthen the Government’s strategy for tackling MTIC fraud. [They have a strategy? Since when?] The Government is determined to build on this success. [e.g by actually achieving some success]. HMRC will take further steps to apply both criminal and civil sanctions to those who are found to be knowingly involved in fraudulent trading. [which seems an odd use of resources if it's really falling as you first said it was]"


But this is exactly what they are doing with their inheritance tax proposals. They will encourage many people to rearrange their affairs in order to leave more to a surviving spouse rather then to their children in order to take advantage of the increased exemption. The main beneficiaries will be the lawyers who rewrite the wills. Since when has it been 'unfair' to take advantage of any opportunity the law affords to reduce your tax burden ?

Another bloody tax on insurance companies:

"Legislation will be introduced to prevent life insurance companies benefiting from tax relief for expenses in respect of reinsured business which have been met by the reinsurer of that business."

I mean, we can't have reinsurers meeting the expenses of reinsured business can we? Before you know it, those damn fool reinsurers will start thinking they know more about the reinsurance business than Gordon Brown or Alastair Thing/Mr Spock or whatever he's called.


why don't you agree with more money for the Armed Forces? Even if you don't agree with the current deployments not that they are happening surely we should be giving the Armed Forces the funding they need to do the job. In fact, the government funding proposals dont go nearly far enough in addressing the endemic problems facing our Armed Forces. They have neglected the Armed Forces for too long while asking them to do so much more.

This should be good for a laugh:
The Government's Commitment to Tax Simplification

I see the BBC Website is lapping Darling's empty promises up - "New Primary schools in every area", "Health spending up from £90bn to £110bn" flashes up on the rolling news ticker!

I know the last week has been great for the party but if we thought the BBC was going to change just like that, we were deeply mistaken. We still have a way to go before the media finally sees through Labours lies!

On CGT, Gordon Brown introduced his first significant reform in March 1998 - his first full budget. He introduced subsequent further reforms in 2000 and 2002. Taper relief was the *cornerstone* of Labour's structural reform in this area. For Darling to immediately eliminate it is rather as if he came in a took back interest rate control from the Bank of England, or broke the FSA up into a number of smaller regulators. It really is the total reversal of Gordon Brown's approach.

Why? I propose the following questions for Gordon Brown:

1) Is Labour now admitting that Brown's approach has been mistaken for all these years?
2) Has the policy been exposed as a failure?
3) If 18% is a good rate, why hasn't it been in place since 1998?
4) The 18% flat rate raises more tax than the previous taper relief system - a huge rise in CGT terms (since the entire CGT take is low). Does that mean that the previous system was failing to cover all the taxes that it should?
5) Do you expect more investment in the UK as a consequence of this tax rise?
6) How would you advise firms to respond in the way they compensate their employees? Should we expect more firms to use share bonus schemes? Would the Treasury regard that as a legitimate response to the new incentives in the system?

We should pin them down on this. Don't let Brown's embarassment on this get drowned out in the IHT discussion!

Hugely enjoyed your commentary this afternoon William. But tell me, are you a tax lawyer for an insurance company?

A New Labour Treasury Minister has just said on Radio 5 Live that they're raising Inheritance Tax to 600,000 because it's starting to affect northern people...

New Labour know where thir votes are.

The rest of us can go to hell!

Gordon Brown better watch his left flank as this is a PBR that will irritate them intensely - with the pressure of a general election having been taken off and GB's own weaknesses I predict that Labour Party splits will be the political theme of the next 12 months.

Sky finance experts: "Already announced, nothing new, already announced, nothing new, IHT not convincing - tenants in common can already do this... no help for divorced parents... smoke & mirrors... makes matters worse for first time buyers... totally political statement ... all typical Brown," Hattersley huffing and puffing, Grant Shapps: 'You are simply wrong.' Nice.

Buried in the small print is this item, which appears to have stemmed from another recent idea:

6.19....the Government will now also:
• explore whether it can reform the stamp duty treatment of initiatives
including the First Time Buyers Initiative...

I'm stunned by Comstock's remarks for two reasons, firstly that whilst cutting inheritance tax is something they are against, politically it is the right thing to do! What better could define the difference between the parties, Conservatives making the case to lift millions of people out of the inheritance tax trap because we believe in lower taxes and Labour doing so as part of some cynical ploy to try and gain some political advantage from it.

Secondly to say that Gordon Brown is in a strong position must take remarkable loyalty to the cause. Brown bottled calling an election because the polls told him he'd lose, he is weak,spineless, yellow , gutless, dithering and indecisive. The Prime Minister who uses our armed forces to try and get the papers to knock the tories off the front page shames the high office he holds.

One day when he finally summons the courage to call that election that so terrifys him, he'll have to stop running., turn round and face the judgement he is so keen to avoid ,then we'll see how strong his position really is. Like George Osborne said "his name might appear on the cover of books about courage but he'll never make it in to the index".

Andrew Lilico: when taper relief was first introduced in 1998 (Mk I) it was actually a slightly revenue-raising move; Mk II from 2000 changed the definition of 'business assets' and actually achieved some good. The problem was, just as with the footlingly stupid 0% band for companies, taxpayers started taking advantage of it far more than they were supposed to and even, horror of horrors, applying the rules to pay less tax. So, once again, they've U-turned on one of their eye-catching tax measures.

It doesn't seem to have been mentioned anywhere above that the £ 600,000 IHT exemption for couples was already available through the simple expedient of a Discretionary Will Trust. So the only difference is a minor simplification of the legal process involved in claiming it.

Moving on from the small-print of the press releases, to Mr Spock's actual speech:

"The new code of conduct for private equity firms drawn up by Sir David Walker will be published next month and will set out much needed steps for increased transparency and disclosure." [=Having piled on pointless costs for listed companies by forcing them to employ bloated compliance depts, we've made it more attractive for companies to be taken off-market. So we'll cripple that lot, too.]

There is no inheritance tax between spouses but if the survivor inherits the estate of the first to die, when the survivor dies their estate is 'loaded' with the first estate and they are then liable for the tax on both estates over the nil rate band. At the moment a lot of people have Wills which incorporate a discretionary trust which leaves the nil rate band to a trust rather than their spouse and the trustees (often the children)can then lend that amount back to the survivor which is then a debt on the survivor's estate, repayable on their death before inheritance tax is calculated. That loan is paid back to the trustees (the children) who also receive the nil rate band of the survivor. So this proposal by Labour will make no difference at all to anyone who has taken the trouble to do some forward thinking.

ES at 17:27 - and Northern Rock (lotsa northern mortgagees) is now backed by the BoE in a way that is raising eyebrows in Brussels and among competitors. Legal, Darling? Sure, Darling? Safest place in the High St for your money, anyway, darling, whether savings or (even better) shares.

Under the FOI, would we be entitled to demand to see the draft of the CSR and PBR that was dated last Friday? Or even last Monday?

There must have been one.

Bet there was no mention of IHT.

My understanding of the IHT change is that it means the surviving partner in a marriage or civil partnership inherits the IHT allowance of the deceased partner (if they don't use it and just give everything to their partner, which they still are entitled do). So when the surviving partner dies they have an allowance of £6000,000 rather than £300,000.

So this dosen't help people who already disperse their assets using their personal allowance (because if you've used it you can't pass it on). Nor does it help people who remain single or become single through divorce.

The people who it will be a real benefit for are the married couples want to give their money to their children (and not the state) but haven't or can't arrange their affairs to allow them to do so.

So I think it is a real tax cut, and it is a conservative method of introducing it as people who live as man and wife but don't marry won't benefit at all. So the real question is. Whats the point of the Labour Party?

The underlying message is that we've won the battle of ideas, again!


On death of the first partner, every husband and wife can transfer £300k at the moment out to their kids tax free. And the rest to their remaining partner, tax free.

On death of the remaining partner, the IHT allowance of £300k is still there (e.g. for transfer to kids), tax free.

So the total tax-free amount available for any couple is already £600k. The only effect of this measure is on those couples who die at the same time as each other.

To quote from the Pre-Budget report:


So there are no extra allowances. And given that this advice was even on the front page of the "your money" section of the telegraph this year, it's hardly a secret loophole...

JohnC at 17.51: see my comment at 16.25 (third on thread).

Returning to the speech, we've got this delight coming our way in April 2010 (that would be after the next election, then?)

"The Government has today published Business rate supplements: a White Paper, in which it announces the introduction of a new power for local authorities in England to raise and retain local supplements on the national business rate in order to fund projects that will promote economic development."

That's something which ought to excite Andrew Lilico. The whole point of uniform business rate is that it's a business rate that's, er, uniform. The whole point of a national flat rate is to stop a council treating its local businesses as a milkcow: every employer pays the same tax rate.

This is a major change, which will allow 'top tier councils' [= arse-licking goody twoshoes box tickers who've sucked up to the Secretary of State/Audit Commission] to levy an additional top-up tax to fund 'economic development projects' [=oh God more unvisited white elephant prestige development arts centres by dead architects].

This is wrong, wrong, wrong. Instead you should be permitting councils the discretion to fund business rate cuts in enterprise zones.

These changes are not a cut in inheritance tax or a doubling in the allowance.

Presently a married couple each has an allowance of £300,000. All the changes do are allow the couple to use both allowances on the second death. At present you need to claim one allowance on the first death and the second allowance on the second death.
To make use of the allowance on the first death you need to engage in some fairly standard inheritance tax planning.

(Under the Conservative proposals the total allowances for a married couple would be £2million but you would need to make use of £1million on the first death).

So no real inheritance tax cut or doubling in the allowance - just smoke and mirrors and very good spinning!

William Norton 16:25

"...In effect Darling's abolished what we call a nil rate band trust for a surviving spouse..."

Is that right? Has he actually abolished Nil-rate band trusts?

If that's the case, my wife and I have just wasted £800 setting-up mirror-wills that rely on the establishment of an NRBT to minimise the IHT liability following the death of the second of us to pop our clogs.

Or is it just that the second to die just 'inherits' the spouse's entitlement to the IHT nil-rate band?

Damn! Either way, it sounds like I could have saved myself £800.

As someone whose eyes go crossed and whirling in opposite directions when the finer points of tax law is being discussed, could I ask William Norton to do a Fisk for Simpletons on the CSR statement this afternoon?

Many thanks.

The 18% regime introduced for capital gains tax is a pure stealth tax.

Has Gordon Brown therefore admitted that the 10% capital gains tax regime, which he trumpeted only 2 years ago from memory as encouraging UK enterprise, has failed. I think there's a few good quotes from Gordon which can be used to upset Darling when he seeks to take those measures forward

The Tory response.

Mike H: mea culpa, should perhaps have said "abolished the need to implement a nil rate band trust". I'll get the hang of this interweb thingy one day.

But yes, on the basis of what I've read this afternoon, you've just contributed £800 to your solicitor's retirement fund unnecessarily. Still, at least he's a more deserving case than HM Treasury.

And the fact that - frankly - it only cost you £800 to undertake the planning is an indication of how valueless Spock Darling's great tax cut actually is.

William Norton 18:31

Thanks for the clarification. As it happens, the NRBDT my wife and I have set-up will still be 'useful' in other ways, even after today's announcement, so my £800 wasn't wasted at all.

You're right, though - supporting my local solicitor is a far more worthy cause than throwing cash at HMRC!

Well done, by the way, for your sterling work here this afternoon.

I am increasingly persuaded by the other people on this site that;

a)That the tax relief in the IHT proposals helps only those people who don't (or can't)plan for IHT. How big a deal that is seems to be debateable, however;

b)The politial climate of the aborted eletion and the memory of the tax con budget means that this probably won't be reported in the media how Darling and Brown want. The newspapers will either report it as a straightforward con, or report it as a Conservative budget by a cynical Chancellor because as far as the media are concerned political cross dressing is SO last season.

No change then

Just a cut in legal fees (+- £500)

A fake indeed. And once again, the "additional £400m" announced for defence is a fake too (link).

I wonder if anybody else notices this time ...

Tom Bradby of ITV took a dim view of todays announcements.

Not verbatim, but something like "criminal theft" of ideas.

Nick Robinson also said it was 'shameless', and 'implausible' to think Darling was goig to even touch on inheritance tax before Osborne announced his proposals.

The change in CGT is a severe blow to entrepreneurs and anyone with employee options.

It looks like it's retrospective too so anyone involved in a successful business in the last few years who hasn't sold shares (or can't sell shares) before April will effectively have a 90% tax increase.

I was starting to warm to Brown, but after this weekend and Darling today ...

I agree with everyone above that in the case of married couples who are both still alive this change only removes the need to set up a nil-rate trust.

However, there is a major benefit in the changes for couple where one has died. The changes are retrospective and can be backdated indefinetely. The surviving spouse is eligible for the double allowance "if a person's tax-free allowance is not used on their death, it can be transfered to the surviving spouse.

My questions is this, what constitutes using the allowance, is it only if the first partner to die uses all of the tax free allowance, or is the amount not used transfered. The problem with the later is that what if the first death occured when the tax free band was say £180 000, is that all that is transfered?

As i say this is the most important "new" news today as it means those who couldn't set up NRBDT as their spouse has already died can benefit.

As a widow whose husband died suddenly in an accident I will benefit from this change but it is of little help to anyone else. We had intended to set up a nil rate band as, given house price rises, we were getting close to the limit, never ever thought it was something we would have to think about. Sadly my husband was killed before we could do it so I am pleased that I can now leave my house to my son. However this is a complete con compared to the simple clear policy of the Conservatives and I hope the press crucifies them tomorrow as it is just beginning to sink in.

Thought Osborne was excellent, and I loved the "where has all the money gone" harmony.

I laughed out loud, and I suspect that Brown and Darling may have shot themselves in the foot this time - this was playing politics, not running the country - it'll be interesting to see which way the polls go after this - certainly anyone watching Brown's smug smile would be tempted to vote Conservative, in my view.

I haven't actually seen the words 'we wuz robbed' but that seems to be the sentiment in a number of the comments and in the Tory response.

I would have thought that if the Tory proposals were made with the good of the country in mind then there would be some amount of satisfaction, rather than the apparent annoyance, that the Government is adopting these ideas.

If, however, the Tory motivation in developing their proposals was (perish the thought) rather more about election winning (or election disaster limitation) then perhaps the 'we wuz robbed' attitude is more understandable.

Overall, perhaps the way to avoid being 'robbed' is to have policies that genuinely reflect a different philosophy and values thus making stealing them a non-starter.

Malcolm said "You don't agree with spending more money on our Armed Forces accommodation Comstock? My God! Are you really that heartless?"

Of course I want to see our forces in decent accomodation, but I believe in having the bare numbers neccesary to keep order and defend the borders, not go off on military expeditions overseas. If we dramatically cut troop numbers we could give them decent accomodation.

Graham said "I'm stunned by Comstock's remarks ....... that whilst cutting inheritance tax is something they are against, politically it is the right thing to do"

I'm in favour of inheritance tax but I also want Labour to win the next election. Thats gonna mean Brown making compromises. I make no apologies for that. I'm sure there are plenty in the Tory party who want to see the minimum wage scrapped, the welfare state abolished and the NHS privatised but they accept compromises are part of political life. So do I.

Good job Osborne. He's a funny guy.

I do agree somewhat with Crighton -mocking Darling and Brown whilst at the same time expressing great satisfaction at controlling the policy agenda might have been a good tack for Osborne to take. They need to be toyed with and made to look ridiculous. Without his so called 'gravitas', Brown becomes neither use nor ornament.

I was otherwise engaged this afternoon and evening and the BBC radio news was making little sense of this IHT proposal. So, sure enough, I come on here and find that William Norton has explained it all. Editor, at future budgets and PBSs, it would probably be even better if you just lined him up in advance to do a live blog? Buried in these late night musings are some questions for him and any other experts reading this - grateful for any response in the morning.

The IHT proposal is hardly a major change, although was carefully crafted (on about Thursday last week I should think) for a headline. As has been pointed out those couples who tax plan through nil band trusts, or who can afford simply to leave the tax free allowance to their children, will not benefit but we should not entirely dismiss the benefit to those who for whatever reason (and there are many quite understandable ones) do not make such plans. The fact is, however, that it is neither as extensive, in its quantum for anyone or in the number of people it will affect if they should happen to die at any time, as the Osborne proposals. The proof will be in the numbers: if it costs a lot less than Osborne's proposals then it is not as big a cut. Anyone with both sets of numbers to hand who can confirm the figures, please do so. The crucial ideological difference is that as Tories we don't approve of the State turning private capital into current public spending; and I suspect that the Darling proposals will still leave a very nicely socialist pillage intact. Osborne's proposals, in contrast, decimated the IHT take.

A couple of devilish details: does the first spouse to die have to have actually left the £300,000 for the surviving spouse to get the transfered nil rate band? What (taking an extreme example) if the first spouse leaves only £20,000 in total (i.e. has no share of the house) but then the survivor, possibly many years later, leaves £600,000. Will his nil band be £600,000 or will it be £320,000? What happens if the surviving spouse remarries? Is there a potential for a £900,000 allowance (I can see the potential in the rich marrying dying paupers)?! Do you loose the transferable allowance from your first husband's estate if you remarry and then die before him leaving most of your money to the children of your first marriage? As the policy may only have been thought up last Thursday, possibly even the Treasury does not know this!

The CGT flat rate of 18% is a remarkable U turn and my immediate thoughts are:
(1) this will bring back all the tax schemes to convert income at 40% into instant capital gains at 18%. Can some new issues of low, or nil, couple gilts be far behind?
(2) as a portfolio investor this is a plus as I can only get to a minimum 20% rate by holding shares for several years; now I can get an 18% rate immediately. Can anyone (William Norton?) confirm that this will apply to gains within trusts (e.g. Will Trusts from grandparents for minors), or will there be some wonderful small print which has us trustees of such trusts still paying 40%?
(3) as an employee of a listed company with shares in that company and executive share options (after a restricted amount, the gains on the latter are subject to income tax and NI on exercise, but if they are Revenue Approved options it is only CGT when you eventually sell; plus gains after exercise are only CGT), my CGT rate when I eventually sell goes up from 10% to 18%. This is tackling private equity from the wrong end: it was not a lower tax rate on shares in a company you actually work for which was the objection; just that these people were not really working for the underlying companies in which they had invested. So hard toiling middle management of listed companies (well, in my case I might not toil too hard, LOL) are to pay for private equity excess. I don't expect protest marches on our behalf but, Mr Darling, thanks a bundle.

There have been sizeable increases since 1997 as there were before, however house prices have gone on skyrocketing and so many more people are ending up being affecting.

The Conservatives when in government had it as official policy to scrap IHT and yet did not, the logical thing to do is to at least exempt the family home from IHT - really what are effectively Estate Duties, after all a real Inheritance Tax would be charged on someone inheriting something, and this is not.

If there was to be some kind of tax on monies and assets at death, it would be fairer if it was in the form of a tax on it as income to the recipients based on their own income and how much their inheritance would add to this in a year.

Although back in the days of the landed gentry such taxes might have served a purpose, I don't think they do now and IHT should be abolished outright really.

Strange, I signed into Typepad and yet when posting this message the site doesn't seem to be recognising this although before posting it was saying I was signed in.

I'd missed Londoner's questions (10 October 00.32 above). Better late than never, in response:

(1) Will this revive schemes to convert income into capital?
I do hope so. Some of us have to live, you know. The differences will be that (a) we've gone back to the pre-March 1982 position (no revival of indexation allowance) so you'll be paying tax on the effects of inflation; (b) there's a whole host of anti-avoidance provisions nowadays, and we can expect more.

(2) What happens to portfolio investments?
Short-term speculators in listed shares have gained (assuming it doesn't amount to a trade). A high-earning individual investor in listed shares had a best rate of 24% if the shares had been held for 10 yrs, and most trusts would have been in the same position. Apparently trusts will also qualify for the new 18% rate (Pre Budget Report Note 17). Companies are unaffected.

(3) Aren't employee-shareholders are the real losers?
You've got it in one. You're paying for all this flapdoodle. It's even better for lower-paid employees who've held shares in their employer for 2yrs: after April they go from an effective tax rate of 5% to 18%. It wouldn't surprise me if come March a lot of directors and employees offload their shares to cash in at the old taper relief rates before the 18% band comes in.

When and in which tory speech was it announced that it was not possible for the tories to increase the IHT limits to a million pounds in the first term of office, and exactly who stated this

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