28th July 2020
Early into the UK lockdown, we wrote the blog Pandemic Financial Considerations to highlight possible financial opportunities available. Seventeen weeks later, we have experienced fiscal support unlike any we have seen before. Whitechurch continues to maintain business as normal and all our teams have adapted well to working remotely. We still do not encourage face to face meetings, however, if you feel one is necessary for your circumstances then please get in touch with your adviser and we can arrange an outdoor meeting following certain guidelines.
Although lockdown is beginning to ease, we understand that there is still much uncertainty. If you have any concerns and would like to speak to somebody, please pick up the phone or drop us an e-mail and we’ll be pleased to talk to you.
The government has announced numerous support schemes that have been essential to individuals, businesses and society as our everyday livelihoods were shutdown. In our blog So What Next? we discussed the ways in which the debts caused by the fiscal support will be repaid. It has been suggested that we are likely to see increases in tax, in particular, changes may be made to Income, Inheritance and Capital Gains taxes.
Our predictions have been strengthened by Chancellor Rishi Sunak recently requesting a review of Capital Gains Tax. If rates are increased and allowances reduced, you could end up with a very large tax bill if you hold a large portfolio or even a small portfolio that has been invested over a long time and grown significantly in value. This means that talking to an adviser could be crucial to making the most out of your investments.
Income tax could be another victim of hikes and talking to an adviser can help you find out where you can reduce or offset as much taxable income as possible. This could be done through investing more in ISAs or pensions - the latter being particularly relevant to higher rate taxpayers, in light of the fact tax relief on pension premiums could be reduced so now would be an ideal time to review contributions.
Predicting taxation changes is as easy as predicting when we will all be safe to shake hands again but talking to your adviser and discussing the points above are good financial planning actions, irrespective of any change. Sunak’s announcement could be a small indication of what is to come as we start to look forward to a post-covid society and paying back financial costs. It’s important to seek financial advice now to make the most out of your investments and prepare for possible tax hikes that could affect you.