Alistair Campbell is probably responsible for the way that modern Chancellors disseminate the pithier elements of their Budgets. Long gone are the days of purdah when the secrets of the Chancellor’s Budget speech remained confined to the battered red box which he held aloft to be photographed by the press corps outside number 11, before heading off to the Commons to reveal all.
Nowadays, leaks have been replaced by blatant political point scoring – Chancellor Hammond went on television to tell us what he was going to say in the lead up to his speech. What we heard on the 8th March was a political statement, rather than an economic one and pretty boring it was too. And as the accountants rushed out their ready reckoner tax tables and the papers printed the key points of the speech any real analysis would come some days later – a week in fact was not such a long time in politics as Mr Hammond was forced, for political not fiscal reasons, to renounce his plans to increase the national insurance tax on the self-employed.
That U-turn notwithstanding, there remains plenty to do before the tax year-end, attendees at the Beaufort Asset Management seminar were told last week. Mark Dolby and Graeme Bone touched on the main changes previously announced by the government and due to come into force this April, notably the dividend tax free allowance, down from £5,000 to £2,000 for investors and company owner/directors. Awareness of the new money purchase annual allowance for pension contributions, personal, annual and lifetime tax allowances for pension savers were all explained and an insight was provided in how to manage and mitigate any tax charges applicable to those who are likely to be in a position to trigger them.
The new sliding scale of fees for the recently bereaved applying for probate, the new tax on QROPS transfers outside the European Economic Area, are two new stealth taxes which will hit many. The latter, affecting British expats living abroad and foreign nationals based in the UK, who will now face being stung with a 25% tax charge if they move their pensions out of the UK.
The benefits of transferring-out of occupational defined benefit (DB) pension schemes was once again stressed, with a case study presented. Barclays Bank, for example is offering transfers valued at some 50 times the annual presumed retirement income. An opportunity that really should be considered for anyone in that position.
Attendees also heard from guest speakers on the tax breaks that enterprise investment schemes (EIS), seed enterprise investment schemes (SEIS) and venture capital trusts (VCT). All these are currently proving very popular with many EIS schemes oversubscribed and closing early this year, whilst opportunities do remain for those wishing to invest in VCTs before the April 5th deadline. Attendees also heard from regular presenters from Ingenious Estate Planning who spoke about their inheritance tax planning and mitigating schemes.
The run up to the end of the tax year in April, which this year falls mid week and before the Easter break, is always the busiest time of the year for us at Beaufort Asset Management and we want to make sure that all our clients’ tax affairs are in order. Billions of pounds are wasted each year by UK taxpayers who just don’t plan efficiently. Please discuss any planning matter with your financial adviser, who will guide you through many of the ways of mitigating inheritance, corporation and capital gains tax bills and making the most of personal, pension and other allowances, as well investing tax efficiently in a number of SEIS, EIS and VCT schemes that are currently on offer and that successive governments of all hues have continued to support.
To speak to one of our expert advisers, please do contact us.