Jonathan Brown, Financial Adviser at Isio comments: “Tax year end is a time when wealth managers help their clients capitalise on any unused reliefs, allowances and exemptions, as well as planning ahead to agree upon the best strategy for the next tax year. Given the recent reduction in Capital Gains Tax to 24% in the Spring Budget, many managers will be guiding clients on how they can benefit from the lower rate if they were to sell their second home or buy to let property. This tax cut could potentially be reversed under a Labour government, so managers and their clients will be urgently looking at the best ways to take advantage of this short window of opportunity, before their tax bill jumps significantly. Anyone in a position to take advantage of the changes should be seeking advice now.
“Another potential future tax change by a new political party could be to bring in line Capital Gains Tax with income tax, or even bring the current levels for non-property assets in line with property Capital Gains Tax. This would be an easy way for any new government to raise extra revenue. It could see the rate of tax paid on gains on shares and unit trusts, outside of ISAs, from 10% to 18% for a basic rate payer and 20% to 24% for a higher rate taxpayer. Anyone looking to understand the potential implications this could have on a portfolio should be looking to pursue advice now.”
Mark Campbell, Head of Wealth Proposition at Isio comments: “At the end of the tax year wealth managers would usually be guiding clients on the best way to maximise savings through the likes of the recently announced UK ISA. However, introducing the proposed ISA before a potential change in government will be highly challenging. Before wealth managers can adequately advise, clarity is critical to ensure that investors can confidently utilise allowances whilst fully understanding the risks that they are taking. Any ISA changes or variations add complications and those without support should seek it, whether that’s advice or free guidance.”
Iain McLellan, Director at Isio comments: “Changes from any government to pension rules or regulations often present a headache for investors, particularly around the end of tax year. While the Government announced in the Spring Budget the abolition of the Lifetime Allowance, progress on a value for money framework for DC schemes and the Lifetime Provider model, they were all confirmations of previous announcements or the next stage of policies that have been in development for some time. While this provides some continuation for savers for the time being, a likely Labour government could reverse that. This creates uncertainty and the potential for further complications, with guaranteed certainty on the rules only likely for the next six months. With this added layer of complication, we expect many individuals will need help and advice as soon as possible.”
|
