Maggie Fleming looks forward to the 2005 Budget and hopes that the financial promises made for Civil Partners are implemented in full.
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When I was a kid, the Budget was quite an occasion. Everybody was excited by it and talked about it at work the next day – well, I suppose we didn’t have ‘Eastenders’ then. Nowadays, it’s only tax professionals like me who get worked up about it. But that might be about to change. This year’s Budget could be the most exciting ever!
The reason is Civil Partnership. Most of you will know that the Civil Partnership Act, enabling same sex couples to gain legal recognition for their relationship, recently became law. What you may not be aware of is that the Act says nothing whatsoever about tax. And yet tax is one of the areas where the unfairness of the law is most apparent – I’m sure we have all heard heart-breaking stories of a bereaved partner having to sell the home the couple shared in order to pay a crippling Inheritance Tax bill.
It seems that the Government has, however, assured lobbyists that the tax laws would be amended to recognise registered civil partnerships in the first Finance Bill after the Civil Partnership Act was passed. And, as the broad provisions of the Finance Bill are announced in the Budget, I for one will be listening to Gordon’s every word while the champagne waits on ice.
What I’m hoping for is a clear statement from the Chancellor that civil partners will be entitled to exactly the same treatment as married couples. That would mean that, during their lifetimes, partners could gift each other assets without having to worry about Capital Gains Tax or Inheritance Tax. And, on death, no tax would be due if everything were left to the surviving partner. That would be such a relief to so many, especially elderly couples who bought homes in London decades ago and now find that the house is worth £600,000 and they don’t have the money to pay the tax if one of them dies.
Let’s keep our fingers crossed. As I write, the Budget date has not yet been set but is likely to be at the beginning of March, especially if, as widely expected, the election is to be in early May. If that happens, there could be a problem. The March Budget might just deal with essentials that can be passed quickly and the real Finance Bill might be delayed until after the election. So even assuming that the Government gets back in safely, it may still be some time before I can open that champagne.
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