Personal Finance: What Brown didn't mention

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Indy Lifestyle Online
The Green Budget may have been good from the point of view of pensioners, who will now receive enhanced cold weather payments. Parents who will now be able to enroll their kids in one of the 30,000 planned out-of-school clubs will also raise a cheer.

But there was precious little in it to excite those of us who may have wanted to base our investment or borrowing decisions on what the Chancellor, Gordon Brown, had to say earlier this week.

The Iron Chancellor - or Iron Laddie, as some tabloids would have him called - said nothing about the new Individual Savings Account (ISA), which Labour intends to replace PEPs and Tessas in 1999.

Draft proposals will be published on Tuesday though, so by next weekend we should all have a better idea of whether to keep our money in existing PEPs and Tessas, or switch to the ISA.

Nor did Mr Brown give even a hint of what the Government intends to do about mortgage interest rate relief (Miras), the tax subsidy currently paid on the first pounds 30,000 of most mortgages.

He may not have said anything this time (would you, after four mortgage rate rises in the past seven months?), but I'd still be willing to wager a small amount that the March Budget will see a drop in Miras relief from 10 per cent in April to 5 per cent the following year, or even its complete abolition.

Perhaps the greatest imponderable is what Iron Laddie wants to do with inheritance tax. The current pounds 215,000 limit, plus good tax advice, combine to ensure that all bar about 15,000 estates each year scrape under the net.

In the run-up to last Tuesday, the air was thick with warnings of what might happen if the Laddie were to take an axe to some of the scams that help people avoid paying death duties.

It was always unlikely, however, that Mr Brown would have said anything on inheritance tax at this stage.Again, I'd be prepared to stick a small wager on this one coming up in a few months' time. Look out for potential exempt transfers being raised from seven to 10 years, or a limit of, say, pounds 500,000 or pounds 1m being placed on them.

More the point, look at some heavy-duty tax avoidance loopholes in a wide range of areas finally being plugged.

One small benefit to investors flowing from the decision to scrap advance corporation tax (ACT) is that investment trusts, whose shares have been trading well below net asset values, may now find it more easy to narrow that gap. In the past ACT ensured that share buy-backs, one way of reducing the discount, were inefficient.

So, all in all, what's the verdict? Five out of 10 for what he said and two out of 10 for not relieving the boredom factor.

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