Latest news with #taxreforms
Daily Mail
3 days ago
- Business
- Daily Mail
Labour lays the ground for September tax bombshell as Rachel Reeves looks to fill £50billion black hole in nation's finances
Labour is laying the ground for tax reforms this autumn that could spell misery for millions. From September the Chancellor will be attempting to prepare the country for a difficult Budget that could be held in November, according to reports. Rachel Reeves must find £50 billion in tax rises or spending cuts to balance the books, the National Institute of Economic and Social Research (NIESR) said this week. However, she has vowed to stick to her pledge to not raise income tax, national insurance or VAT – and will also keep her fiscal rules preventing more borrowing. The NIESR said higher-than-expected public sector borrowing and weaker economic growth had left the Chancellor with an 'impossible' choice. The Bank of England also warned that it is likely to slow the pace of interest cuts as soaring food prices caused by Labour's tax increases threaten to drive inflation to 4 per cent this year. Ms Reeves has already begun meetings with Sir Keir Starmer to draw up a plan for the Budget, according to The Guardian. One tax that is almost certain to feature is a rise in gambling levies. The Chancellor said on Thursday: 'We've launched a review into gambling taxes. We'll set out our policies in our budget later this year.' The Bank of England (pictured) also warned that it is likely to slow the pace of interest cuts as soaring food prices caused by Labour's tax increases threaten to drive inflation to 4 per cent this year Taxes Reeves could hike to fill the black hole Gambling taxes: A think-tank said it could raise £3.2billion. Continue freeze on income tax thresholds: Thresholds normally rise in line with inflation but were frozen by the Tories until 2028. Extending this could potentially raise £8billion a year. Hiking National Insurance: The Chancellor already broke her promise not to increase this measure at the last Budget. Scrapping Lifetime Isa: The Treasury Committee is looking into whether Lifetime Isas – which provide a tax-free nest egg – are fit for purpose. Pension tax relief: Ms Reeves once wrote applying a flat rate of pensions tax relief of 33 per cent – currently 20 per cent – would be 'a welcome boost for basic-rate taxpayers'. Another option that could be under consideration is to target a subsidy paid to High Street banks that costs taxpayers £20billion. Lenders currently receive interest payments of 4 per cent on reserves – which amount to almost £600billion – they have to hold risk-free at the Bank of England. 'The Treasury is on the hook to send the Bank of England over £20billion a year to cover its losses,' said Dominic Caddick of the New Economics Foundation. Yesterday, Shadow Chancellor Mel Stride accused Ms Reeves of 'economic mismanagement'. He added: 'The Chancellor is planning yet more tax raids to plug the gaping black hole she has created – and it's hardworking savers and pensioners who'll pay the price. 'Rachel Reeves is taxing your future to fund her failure.'
Forbes
31-07-2025
- Business
- Forbes
How Smart Year-Round Tax Planning Minimizes Your IRS Tax Bill
Why Proactive Tax Planning Matters With sweeping new tax reforms just signed into law, proactive tax planning could be the single biggest factor in reducing your lifetime tax burden. According to Gallup, an increasing number of Americans want to pay less in taxes. Tax planning is a year-round, methodical effort to minimize taxes paid to the IRS and other tax agencies. A Complex and Constantly Changing Tax Landscape The federal tax code is extremely complicated and difficult to understand. Each state (and the District of Columbia) with an income tax has its own tax code. These tax codes change most years and retroactive tax changes have become more frequent. Understanding the One Big Beautiful Bill (OBBB) Congress passed—and President Trump signed into law—One Big Beautiful Bill (OBBB), officially titled An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14 on July 4th, 2025. OBBB makes large and complicated changes to the federal tax code; some of which will affect 2025 income taxes filed in 2026. Overall, these changes will lower federal income taxes for many Americans. Per a study from the Tax Foundation, OBBB will decrease taxes collected by approximately 5 trillion dollars from 2025 – 2034. Who May Lose Under the New Law Potential losers include: • Those who gamble • Those who purchase electric vehicles - the tax credit expires 9/30/2025 • Those who are improving their primary residence in an energy efficient manner; those tax credits end 12/31/2025 Who Stands to Benefit Potential winners include: • Many seniors who are 65 years old or older • Many people compensated by receiving tips, such as hairdressers and wait staff • Many who receive overtime pay • Some people who purchased a new car in 2025 • Certain business owners that purchase a lot of capital equipment • Certain real estate investors • Many companies that do a lot of research and development in the United States Key Tax Planning Strategies for Individuals Basic strategies for individuals include: • Maximizing retirement contributions • Maximizing Health Savings Account contributions if you qualify to contribute • Choosing when to liquidate assets with capital gains • In some cases contributing to other tax-advantaged accounts such as 529 plans • Choosing tax-efficient investments Smart Tax Moves for Businesses For businesses, essential tactics include: • Choosing the correct retirement plan and maximizing it • Ensuring you deduct all business expenses allowed • Choosing when to purchase capital assets and when to depreciate those assets • Ensuring your business utilizes the correct tax entity. For example C Corporation, S Corporation, Partnership, or Sole Proprietorship Final Thoughts: Plan Ahead to Save More The new tax law is changing tax planning significantly and there are many opportunities for tax planning. If you want to pay less in income taxes over your lifetime; work with a qualified advisor to identify which new strategies you can act on before the year ends.
Yahoo
25-07-2025
- Business
- Yahoo
9 Ways Your Estate Planning Strategy Should Change Under Trump
If you have lifetime gifts or assets to pass on — whether physical property, personal possessions or financial holdings like retirement accounts, CDs and savings — it's in your best interest to create a clear estate plan. Doing so ensures your wishes are honored and your loved ones are protected from unnecessary complications. Find Out: Read Next: Now, with President Donald Trump's administration proposing sweeping tax reforms under the newly passed 'One Big Beautiful Bill Act,' estate planning is once again in the spotlight. These changes could significantly impact how wealth is transferred, taxed, and preserved — especially if the estate tax exemption is made permanent or repealed altogether. To explore how estate planning may shift under a second Trump administration, GOBankingRates spoke with experts about what you need to know — and whether it's time to take action now. Watch for an Expiring Credit An important thing to know immediately, according to David Faust, partner at Gallet Dreyer & Berkey, is that the federal estate unitary credit is expiring at the end of 2025. For this year, that credit is $13.99 million for individuals, or $28 million for a married couple. 'The amount which estates will be subject to federal estate tax in 2026, and later years will automatically be reduced to approximately $7 million for individuals, or $14 million for married couples, unless Congress and the administration change the law.' Wait To See If the Estate Tax Is Permanent On the other hand, the Trump Administration could renew the current, rather high exemption amount and make it a permanent fixture, according to Cory Krueger, an estate-planning and probate attorney and partner at Hensley and Krueger. That would effectively reduce the need for sophisticated tax-free estate planning for 99% of U.S. citizens, though he stressed you still need a will. 'Everyone should still have a will — it will just make things simpler for those that are under the high tax exemption threshold,' he said. Unfortunately, nobody can predict with certainty when this, or any other provisions of the Internal Revenue Code, will change, Faust said. It's best to assume the credit will not be reapproved rather than to hope for the best. After all, sound estate planning depends on realistic decision-making and strategizing. Consider This: Consider These Other Tax Changes While not directly tied to the estate tax, a broad range of proposed tax changes could still impact estate planning by influencing projected federal revenue, which according to Faust, is a key factor in determining whether and how the estate tax might be revised. These include, Faust said, 'raising the limit on deductions of state and local taxes (SALT), reducing or eliminating the tax on tips and social security, lowering the corporate and capital gains tax rates, revising individual income tax rates.' Consider Reducing Taxable Estate In the meantime, Faust encourages people to consider what they can do to reduce their taxable estate and gift tax liability. This could include making strategic cash gifts or carefully timing the sale of a business or stocks to minimize capital gains taxes 'If you live in a state with a high estate tax of its own, be mindful of whether any action might affect your state estate tax,' Faust warned. Don't Expect Retroactive Changes It's also good to plan for the likelihood that any changes in the tax law affecting estate or income may not be retroactive, Faust said. 'Therefore, it is critical for you and your advisors to keep a careful watch over developments in Washington. Be prepared to act but wait until there is more clarity about impending changes.' Prepare To Lose the Step-up Basis If the estate tax is repealed, another negative tax implication could relate to how taxes are assessed for the beneficiary, Krueger said. For example, estate beneficiaries or heirs-at-law of a deceased individual currently receive a step-up in basis related to inherited assets and property. This means the value of inherited assets is assessed as of the date of death, which eliminates capital gains tax on any appreciation of the assets prior to the death of the deceased person. 'If this step-up in basis provision is abolished, the beneficiaries and/or heirs will be forced to pay capital gains taxes upon a sale of the inherited assets — which, in turn, could result in inherited assets remaining within the family for a longer period of time versus a sale on the open market.' Remember State Level Estate Taxes It's also important to remember that no matter what happens at the federal level, many states have their own estate or inheritance taxes with lower exemption thresholds, said Yan Lian Kuang-Maoga, partner at Pitta & Baione LLP. 'Ensure that your estate plan accounts for these state-level taxes, as they can substantially affect your heirs' inheritance,' she noted. Review and Update Your Estate Plan If you haven't revisited your estate plan since the Tax Cuts and Jobs Act was passed in 2017, now is the time, Kuang-Maoga said. 'Work with an estate planning attorney to ensure your plan takes full advantage of the current tax environment.' Don't Make Big Changes Otherwise, Faust suggested that now is not the time to make changes in estate planning, unless there are reasons to do so 'other than trying to anticipate what will happen in Washington.' For now, it is merely the right time to prepare and watch, he concluded. Caitlyn Moorhead contributed to the reporting for this article. Editor's note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on More From GOBankingRates Mark Cuban Says Trump's Executive Order To Lower Medication Costs Has a 'Real Shot' -- Here's Why This article originally appeared on 9 Ways Your Estate Planning Strategy Should Change Under Trump
The National
20-07-2025
- Business
- The National
Emiratis claim Dh3.2bn for new homes under tax refund scheme
The UAE has said citizens have reclaimed Dh3.2 billion ($871 million) in VAT refunds for building new residences as of June, after the launch of the service eight years ago, as the country implements new tax initiatives and reforms. The total number of approved applications for VAT refunds related to new residences for UAE citizens reached about 38,000, the Federal Tax Authority said on Sunday. This is up more than 22 per cent from the 31,000 approved applications and nearly 26 per cent higher than the Dh2.54 billion in June 2024. In the first half of this year, 3,097 new applications were approved, resulting in cumulative refunds of Dh284.77 million, the FTA said. The UAE introduced 5 per cent VAT on most goods and services in January 2018 as part of its plans to diversify and reduce economic dependence on oil. When a UAE citizen owns or acquires land in the UAE on which they build or commission the construction of their own residence, they can claim for a VAT refund incurred on the development. Tax refund options for tourists The FTA also said it is continuing to expand the digital tax refund system for tourists, with the number of registered retail outlets connected to the system rising to 18,410 shops by the end of June. That is up from 17,720 shops at the end of 2024 and the 17,080 six months earlier. The total number of outlets that have joined the digital tax refund system for tourists in the past two years stands at 3,390. The VAT refund scheme for tourists has been available in the Emirates since November 2018. Tourists who spend at least Dh250 on purchases can claim their refunds at designated outlets before leaving the country. The UAE also introduced a paperless tax refund system in 2022 for tourists visiting the country, doing away with the need to retain receipts. In June 2019, the country launched fully automated self-service kiosks across the country to support tourists to claim VAT refunds before departing the UAE. The number of the machines at malls and hotels that automate the tax refund process for tourists, taking only two minutes per transaction, was 96 as of the end of June, the FTA said. In December, the authority launched the e-commerce purchases VAT refund system for tourists during their stay in the UAE. The authority plans to continue to introduce various projects to digitally transform the tax sector in line with the government's strategy to reduce bureaucracy and maintain customer satisfaction, said Khalid Al Bustani, the FTA's director general. 'Among the key initiatives in this area is the 'Maskan' smart application, which enhances the ease and convenience of VAT refunds for Emiratis, and relies on paperless procedures with 100 per cent fully digitised procedures," he said.
Telegraph
17-07-2025
- Business
- Telegraph
Non-dom arrivals plunged as Labour prepared for power
However, it came as opinion polls suggested Labour was on course to win power. Tax lawyers were already then warning of a drop in new inquiries from wealthy overseas clients considering a move to the UK amid Labour's plans to rip up the regime. The fall in well-heeled newcomers also came as former Jeremy Hunt announced in March 2024 he would overhaul the scheme, after months of briefings. Uncompetitive and unattractive Phineas Hirsch, a partner at law firm Payne Hicks Beach, said the fall in new arrivals 'reflects the fact that the writing had been on the wall for some time'. He added: 'Sadly, despite what the current Government has claimed, its tax reforms are not making Britain competitive or attractive. 'Not only are fewer of the world's super-rich coming to live in the UK; thousands are actively leaving – relocating to Italy, Switzerland, the UAE and other jurisdictions which have been introducing their own non-dom tax regimes, because they see the value in attracting inbound wealth and spending power.' In total there were 73,700 non-doms living in the UK in the year to March 2024, roughly 400 fewer than the previous 12 months. Despite the small decline, this group paid £9bn in tax – £107m more than the prior year. The new figures come amid growing alarm that Rachel Reeves's changes have sparked an exodus of the wealthy from Britain. The Chancellor went further than her predecessor by bringing people's global assets, including anything held in previously shielded offshore trusts, within scope of the UK's 40pc inheritance tax. This applies for a decade after the person leaves the UK. High-profile departures Ms Reeves is understood to be considering softening these more controversial rules to stem the flow of wealthy people packing up and leaving. High-profile departures in the wake of the tax changes include Goldman Sachs' most senior banker outside the US Richard Gnodde and Aston Villa co-owner Nassef Sawiris. Reliable numbers on the scale of a potential wealth exodus will not become available until at least a year. However, sales of luxury properties in London's wealthiest neighbourhoods have slumped. Wealth migration adviser Henley and Partners predicts the UK will lose more millionaires than any other country this year, projecting a fall of 16,500. The HMRC analysis shows any exodus is likely to hit London the hardest. Some 58pc of non-doms live in the capital.
