Leading Surrey, Hampshire, and London-based law firm Morr & Co, which has an office in Teddington, has responded to yesterday's UK Budget (Wednesday, 26 November), on how it will affect Mansion Tax and Stamp Duty Land Tax, IHT and EOTS and CGT.

Speaking about Mansion Tax, Jonathan Turner, partner at law firm Morr & Co, where he specialises in property law, said: "Like the monster under the bed, the prospect of Mansion Tax or High Value Council Tax Surcharge from April 2028 is unwelcome, but less terrifying when you know whether it is really there and what it looks like.

"This recurring annual charge for properties over £2m has been widely anticipated and has been lurking since the Corbyn years.

"The charge seems to assume that those owning a £2m plus home are wealthy. Sure, they appear asset rich, but does that mean they have the means to pay such a charge?

"There are several important questions to consider, all of which doesn't seem to have been considered yet, but will be 'subject to consultation' including, presumably, the following:

"If the house is mortgaged up to the hilt, does it still apply? Or does it apply to properties with £2m plus equity? If the latter, then will people be taking out mortgages to keep it under the threshold?

"How will the valuation be agreed, given properties at this end of the market are often unique with a lack of comparable value evidence? There will be plenty which are plus or minus £100k of the £2m threshold, which will certainly invite disputes.

"How will the charge be enforced? What if the homeowner doesn't have the cash to pay it? Can it be deferred? Charged on the property? What are the penalties?

"This tax will trigger a surge in downsizing, which will saturate the market with valuable properties. In turn this will likely depress values overall, thus decreasing the 'mansion tax' income to the government.

"The OBR Report suggests that this 'mansion tax' will raise £400m in 2029-30 and it adds behavioural changes could diminish the tax receipts as 'band bunching' occurs.

"This not only reduces the actual likely yield, but by supressing prices also reduces likely SDLT and CGT receipts.

"Together with the costs of non-compliance and appeals, receipts are likely to suffer even further.

"Given the likely cost of the consultation itself, not to mention the presumably substantial cost of the huge apparatus set up to administer it, one has to wonder whether the cost-benefit analysis stacks up.

"A lot of effort for little reward and a tax that is highly likely to be immediately thrown out by any subsequent Conservative Government."

Speaking about Stamp Duty Land Tax (SDLT), Turner added: "SDLT, a lever pulled by nearly all chancellors, seems to have been left alone on this occasion.

"It is a relief that the SDLT regime isn't being changed which would create yet another unnecessary artificial bubble, but it is also a missed the opportunity to simplify this tax, which used to be simple, but now very often needs specialist tax advisors to ascertain the correct rate payable, with penalties should HMRC not agree that that their often woolly guidance has been met."

Greg Vincent, head of Corporate and Commercial at Morr & Co, said: "The Government's move to cut EOT capital gains relief to 50% is a classic example of short-termism dressed up as fiscal discipline.

"EOTs are not tax loopholes. They are engines of productivity and engagement that keep value inside the business and, ultimately, inside the PAYE system.

"They reduce absenteeism, improve retention and give employees a direct stake in long-term performance.

"Crucially, they prevent wealth from leaking out through the more creative tax strategies.

"By eroding the incentive, the Government risks weakening a model that has consistently supported succession and delivered cleaner transparent ongoing tax flows. It's a false economy and one the UK may feel for years."

Speaking about Inheritance Tax, Jonathan Jacobs, partner, private client at Morr & Co, said: "So far, so unexciting, but still deeply unfavourable for families worried about Inheritance Tax in the 2025 Budget.

"Once again, thresholds and allowances remain frozen until at least 5 April 2031.

"The Nil Rate Band (£325,000) has not changed since 2009.

"Had it risen with inflation, it would now stand at around £620,000 per person.

"For married or civil partnered couples with descendants, the combined Nil Rate Bands including the Residential Nil Rate Band, frozen since April 2020 could have reached £1.7 million, nearly double the current £1 million limit.

"No surprise then that IHT receipts are forecast to rise to £9 billion this year and £14.5 billion by 2031, compared to just £2.9 billion in 2009/10.

"Property price growth and frozen thresholds have tripled the Government's coffers, with a five-fold increase expected by April 2031.

"With pensions becoming subject to IHT from April 2027, families should plan early to minimise exposure.

"The annual gifting allowance remains at £3,000, a figure unchanged since 1981.

"If indexed to inflation, it would exceed £14,000 today. Despite rumours, the exemption for regular gifts from excess income survives and remains a powerful tool.

"Professional advice should be sought annually, and evidence of gifts stored with Wills.

"One sensible change was spouses can now transfer unused Business/Agricultural Property Relief allowances, allowing executors to claim 100% relief on qualifying assets up to £2 million, rather than £1 million. This offers flexibility for succession planning, particularly after an unexpected death.

"Finally, compensation payments under the Infected Blood Scheme will be exempt from IHT, including gifts made within two years of death after 4 December 2025. Details will follow, but families should review these rules carefully before relying on them."