Budget 2007 preview

Tuesday, 20 March 2007 12:00

Tomorrow Gordon Brown is set to give what will almost certainly be his last budget as chancellor.

But what will it contain?

myfinances.co.uk brings you a preview of the possible measures:

Income tax bands
The point you start paying income tax is expected to rise in line with inflation, with the 22 per cent and 40 per cent tax bands also expected to increase.

Stamp duty land tax
Increasingly the public and industry bodies are calling for widespread reform to stamp duty - which is affecting ever more people (full story). But there are rumours that rather than removing the tax, the chancellor might introduce a new five per cent tax band for the most expensive properties.

Expect an increase to the zero-rate threshold, possibly to as high as £140,000, but no change to the three per cent and four per cent boundaries.

Inheritance tax
The inheritance tax allowance is set to rise £15,000 to £300,000 from April 6th and on to £325,000 by 2009-10. Expect another increase to be announced for 2010-11. But with rising house prices meaning inheritance tax now affects two families in five (full story) there are calls to exempt the main family home from the tax as is the case with capital gains tax.

Sin taxes
Taxes on cigarettes and alcohol are likely to rise, with the increasing possibility of a rise in fuel duty.

Green taxes
The chancellor will be keen to outline his green credentials - taxes on air travel, fuel, and cars could well be introduced.

Family tax credits
Families are set to receive a tax boost as the chancellor looks to cement his position as a man for the family.

Help for first-time buyers
While the chances of taxes being changed to make life easier for first-time buyers are low, measures to promote shared ownership or help for key-workers could well be announced.

ISAs
The distinction between mini and maxi ISAs is set to be removed (full story), and there is the possibility the overall ISA limit (unchanged at £7,000 since its introduction in 1999) might be increased to encourage savings.

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