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page 6

BUDGET

8 JULY 2015

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There will be a new cap on the total investment a company

may raise under VCTs, EISs and other risk finance investments

of £20 million for knowledge intensive companies, and £12

million for other companies.

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A higher 500 employee limit will apply to knowledge intensive

companies.

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Venture capital funds will be prevented from acquiring

existing businesses, including extending the prohibition on

management buyouts and share acquisitions to VCT non-

qualifying holdings and VCT funds raised pre-2012.

INHERITANCE TAX

Nil-rate band

The inheritance tax (IHT) nil-rate band will remain frozen at

£325,000 until April 2021.

Main residence nil-rate band

An additional nil-rate band will be available when a residence

is passed on death to direct descendants. It will be £100,000 in

2017/18, £125,000 in 2018/19, £150,000 in 2019/20 and £175,000

in 2020/21. It will then increase in line with CPI. The band will be

transferable where the second spouse or civil partner of a couple

dies after 5 April 2017, regardless of when the first of the couple

died.

The extra nil-rate band will also be available when a person

downsizes or ceases to own a home after 7 July 2015 and assets

of an equivalent value, up to the additional nil-rate band, are

passed on death to their direct descendants. This element will

be the subject of a technical consultation. For estates with a net

value of more than £2 million, the additional nil-rate band will

be withdrawn at £1 for every £2 over this threshold.

UK residential property of non-domiciles

From April 2017 IHT will be payable on all UK residential property

owned by non-domiciles regardless of their residence status for

tax purposes. This will include property held indirectly through an

offshore structure. A full detailed consultation will follow later

this year.

saver

If you downsize your

home,

consider creating a

separate fund to identify

the IHT-free part of the

proceeds.

£