The Autumn Budget, originally due on 6 November 2019, has been deferred. This meant political parties went into the election with just an economic forecast produced in March and the Chancellor’s Spring Statement, even though plenty had changed since then. It’s likely the updated Budget will probably coincide with the start of tax year end planning.
Therefore it makes sense to think about some tax year end planning before the Budget finally arrives. Some things to consider:
The rules on tax relief for pension contributions can be complex. If any changes are made it seems unlikely that it would involve more tax relief. That might mean restricting relief to a flat rate, an idea that has been regularly floated. If you are a higher rate taxpayer, such a change would not be good news.
Capital gains tax
The relative tax treatment of capital gains and income has been highlighted by several parties during the election campaign. The current regime has an annual exemption of £12,000 and a maximum tax rate of just 20% (other than for residential property and carried interest). If you have not yet used your 2019/20 annual exemption, there is still time to do so.
A few years ago there was talk of capping ISA contributions. With ISAs now costing over £3bn in lost income tax according to the latest HMRC figures, such Treasury brainstorming could reappear.
For more details on these or any other tax year end actions, get in touch with the financial planning experts at Alan Boswell Group – call us on 01603 967967 or use the enquiry form at the top of the page.
The value of tax reliefs depends on your individual circumstances. Tax laws can change. The Financial Conduct Authority does not regulate tax advice. The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.