02/10/2024
Hey everyone 👋
With the budget set to be released at the end of October, there’s growing speculation about potential changes that could impact pensions, tax relief, estate planning, and much more. Now is a great time to consider how these updates might affect you and your long-term plans! 👍👍👍
Here’s a quick guide on key areas to watch as the budget announcement approaches:
1. Pensions & Tax Relief: 📈
🔍Labour’s manifesto has mentioned a review of the pension landscape.
🧢 Lifetime Tax-Free Cash Cap: There’s growing talk that a cap could be introduced on the amount of tax-free cash you can withdraw from your pension. This would significantly affect those planning to access large sums at retirement.
💰 National Insurance on Employer Pension Contributions: Another potential change could be the introduction of national insurance contributions on employer pension contributions. This could affect both employees and businesses, so it’s something to watch closely.
2. Inheritance Tax (IHT): 🏠 ⚰️
💵 Though not a major revenue contributor, IHT is still a concern, with potential reforms to business and agricultural reliefs, as well as the taxation of pension death benefits, on the table. Addressing any IHT planning sooner rather than later could help mitigate future risks.
3. Capital Gains Tax (CGT) 💼📊
💰 Given speculation around potential CGT increases, particularly on higher earners, it may be worth considering bringing forward any planned disposals. A mid-year change to CGT rates has precedent, so early planning could be beneficial depending on your circumstances.
Recommendations and Next Steps 💡💡
In light of the uncertainty, I would suggest reviewing your current financial position. Some key actions you may want to consider include:
1. Maximizing pension and ISA allowances in the current tax year.
2. Reviewing any IHT strategies and considering making use of reliefs before the Budget.
3. Evaluating any CGT liabilities to determine if early action is advisable.
4. Exploring the potential role of tax-deferred investment options like bonds, which could help mitigate the impact of any future changes to CGT or dividend tax rates.
💬 If you’re concerned about what the upcoming budget might bring or want to discuss your financial plans in light of these potential changes, feel free to reach out. I’m here to help you prepare and ensure your finances are protected, no matter what changes come our way.
Stay ahead of the game, and let’s plan for a better future! 👩💼💼
