2005 PRE-BUDGET REPORT SUMMARY

• Personal tax

• Employment issues

• Corporate & Business Tax

• Capital taxes and Trusts

• Environmental Measures

• VAT, Excise & other duties

• Anti-Avoidance Measures

Capital Taxes

Planning gain supplement

The government has issued a consultation paper on the introduction of a planning gain supplement (PGS). Legislation would be introduced to extract some of the windfall gain accruing to landowners from the sale of their land for residential development. 

The following are some of the principles that may be considered:

• a system for gathering information as to the value of land proposed for development

• the government would then set a tax rate on these values

• the granting of residential planning permission would be contingent on the payment of the PGS

• there may be a lower rate for development on brownfield sites

• consideration may be given to allowing developers to pay their contributions in instalments over a period of time.

The government recognises that the introduction of a PGS would need to be accompanied by transitional measures. These would help developers already engaged in land sales contracts that were drawn up before this charge was introduced or those who hold large amounts of land where planning permission has yet to be secured.

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This summary is published for the information of clients. It provides only an overview of the Pre-Budget Report, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this summary can be accepted by the authors or the firm.