Gordon Brown's presentation of his Budget was low key.

However, it contained a good deal that was radical and has substantial implications for lawyers in practice, both in their own right as businessmen and also as legal advisors.Capital gains taxIn the July 1997 Budget, the chancellor announced that he would consult on the taxation of capital gains.

A whole package of reforming measures is now proposed amounting to a substantial restructuring of the tax.The proposals will withdraw indexation for periods after April 1998, but instead reduce the amount of a chargeable gain according to the period for which the asset has been held, with a greater reduction for business assets than for others.

It will phase out retirement relief over a five-year period.

The crystallising of losses and, in order to use up the annual exemption, of gains by 'bed and breakfasting' securities will no longer be allowed.

The substantial gainers from the reform will be the owners of business assets where the tapering begins after only one year's ownership, and after an asset has been held for 10 years, only 25% of the gain is chargeable.

Accordingly, where the taxpayer is liable to tax at 40%, the gain, albeit unindexed, would only bear an effective rate of tax at 10%.

Nonetheless there will still be some business losers in that at present where full retirement relief is available the first £250,000 of chargeable gains would be entirely exempt from tax.

In advising clients, practitioners should bear in mind therefore that where retirement relief is available, there may be an advantage in effecting an early disposal.

It should be possible to achieve this by a gift of the assets, typically shares, into a suitable settlement.National Insurance contributionsAs part of the package of measures to encourage people back to work, there is to be a substantial reform of National Insurance contributions (NICs).

At the moment once earnings exceed the weekly threshold (approximately £62 at present) both employee and employer class 1 contributions are levied on the whole of earnings.

From April 1999 both employees and employers will only pay contributions on earnings above a given threshold which the chancellor proposes to align to the single person allowance.

However, in addition the employers' rate of NIC is to be increased from April 1999 from 10% to 12.2%.

This will be a substantial additional expense for many practices.Tax assessment by partnershipsShortly before Christmas 1997, the Inland Revenue put out a statement that in principle it was proposed to withdraw 'cash basis' practices for professions in determining their taxable profits.

It was proposed that professional firms should be required to adopt an 'earnings basis' in determining profits assessable in the tax year 1999/2000, and that in addition the profits which would otherwise fall out of charge on the changeover should be subject to a catch-up charge payable over three years starting with 1998/99.

There was a good deal of criticism of these proposals.

Although the Revenue suggested that they did no more than place professional businesses on the same footing as other businesses, this argument overlooked the very different circumstances of professional practice.

Even if the change were to be made, many practices required more time to install the necessary software and administrative procedures to enable a proper valuation of work in progress.

And further, the burden of the catch-up charge would be very onerous, particularly for smaller firms.

The chancellor and the Revenue have, however, shown themselves as being responsive on these and other proposals put out for consultation.

Although, not unexpectedly, the proposals have not been dropped their operation is to be deferred for a year, and the catch-up charge is to be spread over ten years.

Further, it was originally suggested that the whole of the catch-up charge should be paid by the persons who were partners in 1998/99, but now it will be borne by the partners from time to time., Accordingly, if a partner retires he will then have no further responsibility for the balance of the catch up charge.Now that the final shape of these proposals is known, partners of firms have a number of issues to consider.

The Revenue has made clear that firms are not bound to draw up their accounts on any particular basis.

They may continue, if they wish, to prepare cash basis accounts provided adjustments are made to convert the profit to an earnings basis profit in the tax computations.

Firms will wish to consider, therefore, whether in determining profits for distribution amongst partners they should, notwithstanding the basis of taxation, continue to use cash-based accounting.

Firms will also need to consider whether the extra profit forming the basis of the catch-up charge should be distributed to partners and if so, when.Stamp dutyAn unexpected tax change is that the rate of stamp duty on transfers of property (excluding shares) for more than £250,000 will be increased.

At the moment if the price is more than £250,000 but not more than £500,000, stamp duty is payable at 1.5%, and this is now to be increased to 2%.

Where the price is more than £500,000 stamp duty is now to be payable at 3% as against the present maximum rate of 2%.

This change will apply to transfers on or after 24 March 1998 except for transfers made in pursuance of a contract made on or before 17 March 1998 when the old rates will apply.

It is understood that a conditional contract will suffice, but not an option where the Stamp Office considers that a contract does not arise until the option is exercised.

The 0.5% rate of duty on transfers of shares is unaffected by these proposals.

However, these new rates will apply to documents transferring all other types of property, such as goodwill and patents as well as land and buildings.Where possible, stampable documents should be avoided.

This is difficult in the case of land and buildings where the purchaser will wish the change in ownership to be registered at the Land Registry, but in the case of other types of property practitioners should consider what opportunities may be available for mitigation.

Change of ownership of chattels can be effected by delivery.

Documents of transfer of other property may be capable of being executed abroad with the documents being retained abroad.

It may be possible, in some cases, to deliver the assets in corporate form, thereby giving rise only to a liability to stamp duty of one half of 1%.