Year End Tax Review 2008 Contents New Year's resolutions Investment limits Borrowings and tax Family tax planning Mr and Mrs Give generously and save tax Jam today, or jam tomorrow? Tax payback - tax credits Bringing it back home Children's pensions? A matter of trust Children's savings? All change for gains Second homes Portfolio gains Capital ideas Tax-free perks Employee pensions and NIC Pension policies Employee cars and fuel Business tax Pay rise for the other half? Company or trade Two jobs = too much NIC Should VAT be flat? VAT and cash Inheritance tax One careful owner

All change for gains Since 1998 we have grown used to "taper relief" in the calculation of capital gains - the idea that you pay a lower rate of tax if you own an asset for longer. For big gains on business assets, the rate of tax fell to 10% after only two years; for investments, the minimum rate has been 24% after ten years. In his first major announcement as Chancellor, Alastair Darling said that taper relief would be scrapped on 6 April 2008, along with a number of other rules that complicate CGT. There will be a simple flat rate of 18% after that. This is an immediate departure from the world of Gordon Brown: not only was taper relief one of Mr Brown's big ideas, but Mr Darling's change is a genuine simplification of the tax. We have not seen anything like that in ten years. The problem is that there are winners (who would have paid more than 18%) and losers (who would have paid less). The losers have been very vocal, and there are signs that some alterations to the simple plan will be made when the March Budget comes out. So it is difficult to be absolutely sure what to do: is it better to sell before the rules change, or to wait until afterwards? If you have assets standing at a gain, or securities with "deferred gains" attached to them, it is certainly important to review what the rule changes mean to you. For most investors, including buy-to-let owners, the changes are almost certainly beneficial. For employees owning shares in the company they work for, and for business owners, they are probably not. It will be important to have a clear picture of where you stand in time for the announcement of the final rules on Budget day. The last few weeks of the tax year are likely to be very busy for those who stand to lose! Action Point! Have you gains you want to realise at lower rates?