9am Lowdown: Inheritance tax, Gibraltar & AirBnB

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Good morning! Today's lowdown features more news from the general election campaign trail.  

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Inheritance tax moves into election spotlight

Labour’s manifesto is expected to halve the inheritance tax threshold to £425,000, according to the Evening Standard.

Shadow chancellor John McDonnell confirmed on BBC radio that if Labour is successful at the general election he reverse the tax giveaways that favour the better off. A shadow Treasury spokesman told the Evening Standard that Labour’s manifesto released in the week will prioritise a fair tax system that “stands up for the many, not the few”.   

“Labour do not support the Inheritance Tax giveaways announced by the Tories, as according to their own figures only 26,000 fewer estates would have no tax liability in 2020-21 at a cost of almost £1 billion,” the spokesman added.

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AirBnB tax break removed from Finance Bill 

The government has quietly dropped the £1,000 tax allowance for the AirBnB generation that former chancellor George Osborne announced in the March 2016 Budget, reports the Telegraph.  

The £1,000 tax break for micro entrepreneurs who rent out their home was expected to benefit half million people. But this tax break for the digital age was another measure removed from the Finance Bill.

This tax allowance joins other measures such as digital reporting and record keeping for Making Tax Digital that were shelved before Parliament dissolved for the general election.

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Spain expected to target Gibraltar's tax in Brexit negotiations

Spain will use its veto in the Brexit negotiations to target the Gibraltar’s “permissive regime of taxation,” according to a leaked Spanish government report Spain.

As reported in The Telegraph, the report notes that Gibraltar has “developed its own permissive regime of taxation, customs and company registration, which in practice have made it into a tax haven”, the report states that the territory’s “situation has become one of unjustifiable privilege”.

Gibraltar’s corporation tax is 10%, while Spain has a corporation tax rate of 25%. The report said Spain will target the “unfair competition" from the Rock. 

About Richard Hattersley

Richard Hattersley

Richard is AccountingWEB's practice correspondent. If you have any comments or suggestions for us get in touch.


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