Hot on the heels of the government's U-turn on the so-called 'pasty tax' and VAT rise on static holiday caravans, Chancellor George Osborne has had to climb down from yet another Budget proposal – the limitation of tax relief on individual charitable giving.
Following the Budget announcement in March, the idea to restrict tax relief on charitable giving to 25% of income or £50,000, whichever was the greater, was to be consulted on this summer.
The new rules on philanthropic donations would have come into force next April but charities claimed that these would cause major donations to cease and called upon the government to reconsider its position. Many UK charities united in their cause to exert pressure on the government by joining the 'Give it Back, George' campaign.
The Treasury has now announced that it will exempt charities from the tax relief cap because of the uncertainty it would cause and the potential damage to donations. Plans to cap other tax reliefs are expected to be consulted upon this summer however.
This latest Budget rescindment led Robert Peston, BBC business editor, to tweet, “I can't remember so much of any Budget disintegrating so fast”.
Last week, the Treasury published a consultation document titled, 'Ensuring the fair taxation of residential property transactions'. The document explores proposals announced in this year’s Budget of an annual charge on residential properties valued over £2 million owned by “non-natural” persons such as companies, partnerships and collective investment schemes. It also proposes extending Capital Gains Tax to the disposal of UK residential property by certain non-resident, non-natural persons.
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