THERE may be trouble ahead, crooned Nat King Cole. The sight of Gordon Brown, the Prime Minister, sitting on the front bench of the house last week at the end of Prime Minister's questions must have raised a few titters from other party members including his own, as well as political commentators and the public at large.
Metaphorically peppered in birdshot! The shell-shocked look of our beleaguered PM following the onslaught from Conservative leader David Cameron after the recent "hijacking" of proposed Tory tax reforms, all repackaged and embarrassingly presented as his own party's, reminded me of Lincoln's famous quote "you can fool some of the people some of the time, but you can't fool all the people all of the time".
While the entertaining exchanges may not live long in the memory of the house, I believe this is not the case with the vast majority of the voting public who would have struck a serious blow to any election victory hopes Mr Brown had only a few weeks ago as confirmed in recent opinion polls, a big factor leading to his embarrassing last minute call off.
Some of the main issues still fresh in the memory include a well-documented ten years of stealth taxes and the looting and destroying of the nation's final salary pensions - once the envy of other leading modern economies - to the pitiful wounded animal we have today, which has left tens of thousands of pensioners living on a pittance following collapse and closure of their once proud system.
Others let down badly throughout this period include first-time homebuyers caught up in the ridiculously unnecessary stamp duty net and let's not forget the so-called pensions simplification regime implemented in April 2006.
Initially looking like something written by Hans Christian Andersen, these new rules relating to private pensions saw more changes, U-turns and amendments pre and post-implementation day, which left many financial advisers scratching their heads wondering what advice to give clients from one day to the next.
Yes we all have long memories.
Turning to Alistair Darling's recent pre-budget announcement on
inheritance tax, the main proposal of allowing UK-domiciled married couples to use both their nil rate bands of £300,000 each is something financial advisers, with the help of solicitors, have been doing for years.
It is easily achieved by setting up discretionary will trusts, and whilst I won't go into the ramifications here of how this planning benefits married couples, and now civil partners, trust me when I say this announcement should not be interpreted as anything new.
Granted the new measures will avoid the need to set up the trust from now on and benefit those who didn't plan before, as the surviving partner can retrospectively claim the tax exempt allowance their partner was entitled to, particularly important where the estate is made up mainly of property. The allowances will rise to £350,000 per individual by 2010-11 and although the new measures will save £120,000 IHT at current rates, it is not as generous as shadow chancellor George Osborne's proposals of raising the overall nil rate band to £1 million, a saving of £280,000 overall.
THE other major changes announced are in relation to
capital gains tax and there are certainly winners and losers in these proposals which are designed to raise funds for the treasury over the coming years.
The introduction of a flat rate of 18 per cent on gains replaces the old taper relief and indexation rules, which although thought of as complex, significantly reduced the level of tax an individual would have to pay on the sale of assets such as property and shares.
Older investors will be particularly singled out as losers here, as they are more likely to hold assets purchased in the 1970s and 1980s.
The abolition of indexation relief in particular means they can no longer offset their gains eroded by inflation, which doubled the prices of many goods between 1982 and 1998. Whether we are in for more of stealth taxes remains to be seen, and I would not bet against it if last week's announcements are anything to go by.
It will be interesting to see what Mr Darling adds to the main budget agenda in the spring, but as far as the savings public are concerned, I wouldn't anticipate too many handouts.
Creating a strong savings culture is so important for many and a relaxation of the tax rules would, in my view, encourage more wealth creation which can be passed on to future generations in a more tax efficient way.
So let us hope the Conservatives can come up with further innovative ideas which can subsequently be implemented by the Labour Party, leading to a better system for all.
? Tom Munro is director of Tom Munro Financial Solutions.
