Budget Highlights

• Inheritance tax exemption £300,000 by 2007
• Stamp Duty Land Tax threshold increased to £120,000

Brown pledges to meet ‘the global challenge’

Presenting his ninth Budget to the House of Commons, Chancellor Gordon Brown pledged to entrench ‘long-term stability’, and to ensure ‘fairness and opportunity’ for hard-working families in the UK.

In what is likely to be the last Budget before an anticipated general election, the Chancellor was keen to emphasise that the UK has experienced the longest period of economic growth on record, and confirmed that he had met his ‘Golden Rule’ by a margin of £6bn, despite criticisms that his economic forecasts were overly optimistic.

Highlighting the significant economic and educational challenges posed by developing countries such as China and India, the Chancellor announced a number of measures aimed at boosting UK competitiveness. These include reducing the red tape burden by cutting the number of regulatory agencies from 35 to 9. In addition the Government will adopt the recommendations of the Better Regulation Task Force.

As widely anticipated, the Chancellor announced that the lower stamp duty land tax threshold will double to £120,000. The move will benefit first-time buyers, the majority of whom have become liable to pay the duty as a result of rising house prices.

The inheritance tax threshold will also increase from £263,000 to £300,000 by the year 2007, while child tax credit will rise by 13% in line with earnings, over the course of the next three years.

Economic forecasts for 2005/06