News

What could the Spring 2017 Budget have in store for families undergoing change?

  • March 07, 2017
  • By Hunters Law

Amid headlines of the continuing political turbulence caused by Brexit and the Trump administration, there has been comparatively little media attention given to the prospect of any important changes emerging through next week’s Budget. Yet for families undergoing change, this fiscal event could significantly affect asset valuations as well as the structure of financial arrangements, so family lawyers will be wise to keep a close eye on the Chancellor’s speech.

As the political climate of Brexit appears to be steering the UK away from freedom of movement of people, this may well be the time to confirm the abolition of permanent non-domiciled status, which could significantly affect the taxation of international families. The Institute of Directors has called for the Government to match the cuts to corporation tax in the US being implemented by the Trump administration, as well as measures to assist small businesses in town centres, many of which are likely to be run by families.    

Lobbying by various industry bodies may result in changes to the tax system. The Institute for Fiscal Studies has observed the emergence of the gig economy and a shift towards individuals working through owner-managed companies. This suggests the alignment of income tax across different forms of business to remove the existing disparity between employment and self-employment. Should such a reform of the tax system take place, family lawyers should be careful to monitor how this may affect business interests pre-dating the marriage when negotiating a pre-nuptial agreement, as well as the vulnerability and protection for spouses, where a family business represents one of main assets in a financial remedies negotiation on divorce.

In terms of immediate taxation changes, confirmation is expected of the start date for penalties for non-compliance in tax reporting of income and capital gains together with measures to counter disguised remuneration, including a possible proposal to transfer PAYE and NICs liabilities to employees. Whether or not such measures will boost the Treasury’s coffers remains to be seen, but those affected will reduce estimates of their wealth. On a more positive note, confirmation of the prevention of excessive tax charges arising on the part surrender and part assignment of life insurance policies would enable individuals to free up assets needed for cash flow in the short or medium term to meet the significant expenses often encountered by families during relationship breakdown.

While commentators are cautious about predicting significant changes arising as a result of next week’s announcements, the experience of the last 12 months suggest that events rather than forecasts will continue to have the biggest impact on the financial confidence and decision making for families undergoing change in these interesting but uncertain times. 

Graeme Fraser

Partner

Hunters incorporating, May, May & Merrimans

Related News

Jun 02, 2020
Amy Scollan discusses solving unusual family law cases
May 26, 2020
Henry Hood recognised in Citywealth’s Top 20 Lawyers 2020 and Top 10 Lawyers – Family & Matrimonial 2020
May 19, 2020
Amy Scollan discusses divorce and trust disclosure
May 12, 2020
Amy Scollan discusses divorce and financial disclosure
Apr 30, 2020
Rebecca Christie outlines the “55” Silent Solution for sufferers of domestic violence
Apr 27, 2020
Henry Hood examines trusts in divorce in HNW Divorce Magazine
Apr 21, 2020
Alexandra Baggallay considers options available for separated parents during COVID-19 in New Law Journal
Apr 15, 2020
Richard Kershaw discusses the treatment of future earnings in Expert Witness Journal
Apr 14, 2020
Hetty Gleave examines child arrangements for international families during Coronavirus in Lawyer Monthly
Apr 09, 2020
Rebecca Christie discusses love under lockdown

© Hunters Law LLP 2020 | Privacy NoticeLegal & Regulatory | Cookies Policy | Complaints Procedure

Hunters Law LLP is authorised and regulated by the Solicitors Regulation Authority (number 657218)