Smash hit

Brown also clamped down on several tax-planning schemes that have come to the government’s attention since it introduced disclosure rules in 2005.

Schemes that create artificial losses that can be set against profits to cut capital-gains tax were banned, although accountants said it was unlikely to affect ordinary taxpayers. They will still be able to offset genuine losses, such as on shares, against profits, perhaps on property, to reduce CGT.

Savings

Many savers were disappointed that the chancellor did not raise the Isa limit from the current £7,000, but he did confirm that the tax-efficient schemes will extend beyond 2010 and will become more flexible. Mini and maxi Isas will be abolished next April. Currently, investors can invest up to £7,000 into one stocks and shares maxi Isa or they can take out two mini Isas — up to £3,000 can be invested in cash and the remaining £4,000 can be invested in equities.

In their place, investors will be able to put up to £7,000 into a single Isa — this can either be split between cash and equities, with the limit on cash remaining at £3,000, or the full £7,000 can be put into shares.

Brown also announced a rule change that allows people to transfer Isa money from cash into equities. They will not be able to do the reverse however.

Justin Modray at Bestinvest, an adviser, said: “This has serious implications for long-term savers as it is natural to move money away from equities and into cash later in life when capital preservation becomes more important than growth.”

Advisers had also hoped Brown would take the opportunity to raise the Isa limit. It has remained unchanged at £7,000 since Isas were introduced in 1999 and it is lower than the limit on personal equity plans (Peps), the tax-free savings scheme they replaced. Investors could put up to £9,000 a year into Peps.

Richard Wastcoat at Fidelity, a fund manager, said: “If Labour is serious about fostering a long-term savings mentality it should raise the limit to £10,000.”

However, the announcement that stamp duty will be abolished on international exchange- traded funds (ETFs) was welcomed. ETFs are like tracker funds as they follow a specific equity, bond or property index. Unlike trackers, they are listed companies which trade on the stock exchange.

ETFs are growing in popularity because they are a cheap way of getting exposure to an index. However, investors have had to pay stamp duty of 0.5% on ETFs that are listed on overseas stock exchanges, even though there is no such charge if the ETF is listed on the London stock exchange.

This means most British investors buy UK-based ETFs, although there are only 47 available here. The abolition of stamp duty on non-resident funds will therefore give British investors access to a greater range of ETFs.

Families

Women will get child benefit from the 29th week of pregnancy worth up to £200, but it was not all good news for families. They will be up to £70 a year worse off because the thresholds for the child tax credit have not been changed.