Private client lawyers are set to see a significant increase in work over the coming months as measures affecting high net worth individuals take centre stage in this year's Budget, which was unveiled today (21 March).

Chancellor George Osborne has put measures targeting the wealthy at the core of a budget that is also set to cut tax for business and clamp down on tax avoidance by corporates and individuals.

Most notably, private client and real estate partners will find themselves advising clients in relation to the introduction of a 7% rate of stamp duty on property sales over £2m, and Osborne's plans to crack down on stamp duty avoidance among the rich by preventing individuals from placing expensive property into offshore companies.

Individuals buying properties over £2m through a company will now face stamp duty of 15%. Currently the highest stamp duty rate is 5% on sales worth more than £1m.

However, those earning more than £150,000, which would include most law firm partners, will benefit from a reduction in the top rate of income tax from 50p to 45p in April 2013.

The rise in income tax rate from 40p to 50p was announced in former Chancellor Alistair Darling's 2009 Budget, and took effect in 2010. At the time, advisers said that a City partner earning around £1m would pay well in excess of £50,000 of additional tax a year under the measures.

Other changes affecting the private client sector include a £50,000 charge for non-doms living in Britain for 12 years that can be offset for those investing capital in the UK.

Macfarlanes private client partner John Conder said: "The reduction in the 50% tax rate will have a beneficial impact on the economy, encouraging inward investment of money and talent and discouraging people from leaving, sending the right message in terms of welcoming wealth creation and simplifying the tax system which reduces the desire for tax mitigation."

LG corporate tax partner Elliot Weston (pictured) added: "We expect that the relief for investment in UK businesses by non-domiciled individuals will be of most interest to our entrepreneur clients and will produce an increase in work.

"There is also significant interest on the changes to Stamp Duty Land Tax which are likely to attract a lot of questions from clients, although I think the evidence that high value homes are often transferred through a corporate sale has been over-exaggerated."

Measures affecting business include a 2% reduction in corporate tax to 24%, dropping to 22% by 2014, and the introduction of a new General Anti Abuse Rule to clamp down on any tax avoidance schemes used by large corporates as well as individuals.

Meanwhile, real estate investment trusts (REITs) are expected to be made more attractive with the abolition of a 2% entry charge, relaxation of the diverse ownership rule and the introduction of a three-year grace period for REIT startups, with the new legislation set to come as part of the 2012 Finance Bill.

The UK economy is expected to grow by around 0.8% in 2012.

Deloitte tax partner Karen McNicholls said: "The biggest thing for the legal sector is whether the budget will act as a stimulus for economic growth and stability, which will in turn drive up activity levels for firms in the longer term.

"It is important to keep the macro picture in mind because it is so important to UK and international commercial activity and has a direct effect on the demand for advisory services.  On a micro level, of course, changes to taxes in certain areas could lead to a short term flow of work as people respond."

Other changes included in the Budget

• Personal income tax raised to £9,205 from April 2013, with an increase to £8,105 from next month.
• Child benefit will be phased out when someone in a household has an income of more than £50,000. It will fall by 1% for every £100 earned over £50,000. Only those earning more than £60,000 will lose the entirety of the benefit.
• Corporation tax reliefs for the video games, animation and high-end television industries from April 2013, subject to state aid approval.
• Corporate tax relief reduction of 10% for profits attributed to patents and similar types of intellectual property.
• Tobacco products duty rates will increase by 5% above inflation from today (21 March).
• Tax relief on gambling duties.
• Vehicle excise duty will increase in line with inflation except heavy goods vehicles which will be frozen in 2012-13.

View all the Budget 2012 documents here.

More reaction from the market

Withers wealth planning partner Sophie Dworetzsky (pictured): "An almost radical Budget which still had a few surprises despite being quite 'leaky' in advance. We see the promised crackdown on Stamp Duty Land Tax Avoidance, with a real twist in the tail – where UK property is bought through an offshore company, SDLT will apply at 15% if the property is worth £2m or more. We were told it would be a Robin Hood budget. If so, it is prettily presented."

Herbert Smith real estate head Ian Cox: "The expected changes to the REIT regime are good news for the sector –in particular the repeal of the entry charge and the relaxation of other REIT conditions may trigger a flurry of conversions to REIT status. Whilst the changes to the residential SDLT rules are of interest (particularly how SDLT will be collected where the property is held offshore), the key concern for the sector as a whole is that these changes are the first step towards similar measures for non-residential property, rather than the end of the story."

Smith & Williamson national tax director Richard Mannion: "The most pertinent areas of the budget for the legal sector are the changes to stamp duty tax and their likely impact on property lawyers. There have been reports about estate agents becoming responsible for ensuring they do not allow people to buy property that are intending to evade stamp duty, but I expect the onus may actually fall on lawyers as it would be easier to regulate. The Solicitors Regulation Authority has also issued a note recently stating that lawyers need to be careful not to use some of the abusive SDLT structures around for clients and reminding them of their accountability in this respect. Areas that may affect lawyers individually of course are the changes to the 50% income tax and pensions."

Travers Smith tax partner Simon Yates: "The changes in REITs tax are likely to be important to firms that are active in the real estate sector, although in many ways they aren't new as they have been well trailed. When REITs were initially introduced the then government was very concerned about abuse, and as a result the regime was sufficiently restrictive that a REIT would very rarely be the entity of choice for a start-up property fund. Following the changes, they still won't be the right choice in every case, but REITs will look a lot more competitive."

Freshfields Bruckhaus Deringer tax head Colin Hargreaves (pictured): "Many of the changes that have been trailed are focused more on individuals, such as the possible 50p tax change. However, there are some that could produce an impact for corporate tax groups in law firms such as the Controlled Foreign Company changes which will require companies to think about changes to their current systems, alterations to the REIT rules and possible changes to stamp taxes."

Ashurst head of tax Richard Palmer: "Tax decisions are a lot more political today than they were a few years ago, which means that they are not purely economically-driven. The focus on tax avoidance will be well-received if it is properly targeted. Drawing up a plan to reduce corporation tax in line with being the most competitive tax regime in the G20, possibly to 20%, would give corporates some much needed clarity. In terms of individual tax rates, the 50 % tax rate hasn't generated the revenues that the government had expected and has probably hampered growth in the private sector so its reduction will be welcomed."

DLA Piper tax partner Richard Woolich: "The introduction of the 15% 'Robin Hood' stamp taxes charge on the purchase of £2m homes by non-individuals, is a politically motivated headline-grabbing measure. Avoiding stamp taxes is seldom, if ever, the main reason behind transferring a residence into a non-UK corporate wrapper. Keeping the property outside the IHT net is in practice, a much more important factor. The reduction in the main rate of corporation tax by 2p to 24p in April, doubling the cut previously announced, is a positive step on the road to giving the UK one of the most – if not the most – competitive corporation tax regimes, alongside the reduction in the top rate of income tax, the redrafting of the CFC rules and the patent box."

DWF private client partner Paul Davies: "We welcome the removal of the psychological barrier of the 50p top rate of tax and view this as a positive move that is sure to encourage high net worth individuals to live and work in the UK. However, I believe the introduction of the General Anti-Avoidance Rule (GAAR) will lead to uncertainty for businesses and individuals, and will put an enormous demand on HMRC, which is already stretched. There is a real danger that the GAAR will not be applied consistently. The other concern here is that this situation will actually lead to a more – and not less – complicated tax system, which is the opposite of what the government has previously set out to achieve."

Maurice Turnor Gardner private client partner Arabella Murphy (pictured): "Anyone in the legal sector will get a small pay rise from the raising of the untaxed proportion of earnings, while those lawyers with higher earnings are set to benefit from the drop in income tax from 50% to 45%. This may also create more work for lawyers as a lot of people will likely want to defer earnings from his financial year to next year to take advantage of the lower tax rate. The reduction in corporation tax should be good news for lawyer work flow."

CMS Cameron McKenna tax head Richard Croker: "The package of measures on expensive property is nakedly designed to stop the packaging of residential property in a corporate wrapper. No-one is going to transfer a UK property to a corporate at 15% SDLT. Keeping the property in one's own name, in a trust or partnership if anonymity is important, will become the norm, at the cost of 7% SDLT on future sales. Nor are existing corporate wrappers excluded – the suggested annual charge will help see them off over time. The clincher in this respect may well be Capital Gains Tax on the non-resident corporate property owner from 2013 – another incentive to extract the property from a corporate wrapper before it's too late. This is a clever move as double tax treaties tend to allow the UK to tax local property gains of non-residents so it's hard to evade.  That leaves any buyer of £2 million property having to swallow SDLT at 7% – but the sweetner is the intention that Brits will be taxed at the same rate as the non-dom super rich in future."

Baker & McKenzie head of wealth management Ashley Crossley (pictured): "This budget had a very international flavour. Osborne frequently referred to China and our key international competitors. The changes to the additional rate to 45p, corporation tax and new allowances are designed to attract an international audience and show the UK is open for business for inward investment. That is good news. The 50p was a political statement. It brought in little revenue and harmed the UK's reputation as a place to do business. The reduction is a good first move.

Eversheds construction partner Dominic Lacey: "A water industry model would involve many more road concession arrangements with toll usage charges. The political challenge to extending direct road payment charges lie with the well founded belief of many road users that they are already paying for the provision of road infrastructure investment and maintenance through road fund licensing and petrol duty. The government will never be able to step back from road investment if payments for road usage are actually made to private sector investors by the government rather than by a road user."

Nabarro head of tax Michael Cant: "Provided any legislation that eventually emerges is based on that which was produced by the Aaronson Committee last summer, taxpayers should not fear the introduction of what amounts to an English abuse of rights principle.  With the correct safeguards and a willingness on the part of HMRC to scrap convoluted and complicated existing legislation, a GAAR could go a long way to making OUR Tax legislation less not more complicated."

Pinsent Masons projects and construction partner Patrick Twist: "The Chancellor's announcement on additional support for infrastructure is to be welcomed. The investment in upgrades of the rail system in the northwest have been long sought after. Other announcements such as the review of airport capacity, the proposals for private sector funding of roads and superfast broadband will only be worthwhile if they are actually followed through. Since the Comprehensive Spending Review cut back on infrastructure spending the coalition has been long on announcements and short on delivery."

Berwin Leighton Paisner tax head Michael Wistow: "We welcome the reduction in corporation and income tax rates to encourage entrepreneurial endeavour and thus increase the overall tax take, and the aspiration of introducing greater simplification into the tax system. However, people in the City will be worried that the moves towards a more competitive tax regime will be drowned out by the other changes that are being brought in – the repeated threat of retrospective changes to the law and the introduction of CGT on offshore investors' ownership of property by way of example. With the proposal to levy a 15% charge on residential property acquired in corporate vehicles the Chancellor is slamming the door in the face of foreign investors coming to the UK before they even book their air ticket."

Wiggin partner Charles Moore: "Today's announcement will have an enormous impact on the UK TV industry and we are thrilled to have played a key part in this campaign. High-end TV production is an international growth industry and the new incentive will have a major impact on employment, skills and inward investment in the creative industries throughout the UK."

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