Summary of the taxation provisions

In his tenth and possibly his last Budget, Gordon Brown focused on his spending plans, but the accompanying notes revealed a range of important tax announcements. The tax regime for real estate investment trusts - REITs - was finalised. Small companies will benefit from an increased first year allowance for plant and machinery. There will be an extension to research and development tax credits.

The Chancellor also revealed that accumulation and maintenance trusts and many interest in possession trusts would be treated in the same way as discretionary trusts for inheritance tax - with immediate effect. There are very few exemptions. Investment in venture capital trusts will qualify for income tax relief of 30% for 2006/07 (down from 40%), and investors will need to hold their shares for at least five years. Funds left over on death in 'alternatively secured pensions' for people over 75 will normally be subject to inheritance tax.