A rise in the threshold for stamp duty on house purchases and additional payments into the government's child trust fund scheme formed part of the 2006 UK budget unveiled by chancellor Gordon Brown.
The stamp duty threshold, the tax paid on house purchases, will be raised from GBP120,000 to GBP125,000. The chancellor said that this, and the last budget’s measure, takes 400,000 homebuyers out of the stamp duty net. The amount of inheritance exempt from tax will also rise over the next four years from GBP275,000 this year to GBP325,000.
For families with a child trust fund, the chancellor promised extra payments on top of the GBP250 – or GBP500 to lower-income families – invested for every child. These funds will now get additional payments of GBP250 and GBP500, made at the age of seven. Low and middle income families will also see a rise in the child element of the child tax credit.
For savers and investors, the chancellor announced that the tax break for investing in venture capital trusts would continue, but the amount of tax relief given has been reduced from 40% to 30%. From April 6, people who have taken a tax free lump sum out of their pension scheme can reinvest up to 30% of this money into another pension scheme and receive tax relief. The tax-free limit on ISAs is to remain at GBP3,000.