Alice Sanders, one of our chartered financial planners, was recently asked by Citywire for her views on the upcoming Budget and what, given the power, she would do to influence its outcomes. This was her response:
‘I think I would try to instil some certainty in the tax regime.
In the last few years, there has been so much speculation, which has led to clients making decisions that they might not have otherwise made, and which are sometimes not in their best interests.
I think the tax regime is overly complicated, and some of the changes that have been introduced or that are coming down the line made it even worse. So, I would try to introduce stability and certainty around the Budget so people can plan more intentionally for their futures.
Clients are still talking about it; it’s at the front of everyone’s minds.
In terms of pensions being introduced into the inheritance tax, the noise has quietened down quite a lot. We know now that from next year pensions are going to be introduced into the estate. Assuming nothing changes there, we’re planning with clients for that already.
I haven’t had as many questions or concerns from clients about the tax-free cash entitlement which in previous years’ budgets has been a real topic of conversation with clients, particularly those who have large pension pots – they might be impacted by a reduction in the tax-free cash entitlement.
I think clients are fearing there will be an increase in capital gains tax (CGT) but we haven’t had any clients make any rash decisions, which about two or three years ago we did have clients calling me and wanting to crystalise gains before CGT gains increased. But there doesn’t seem to be so much concern around that at the moment.
I think people have perhaps realised that when significant changes are introduced – obviously last year when CGT rates were increased – it takes a long time for these things to be put into legislation and make laws. Maybe clients have learned from the last few years.’
