If you are currently tax planning in Oswestry, there are rumours are that the Chancellor, Rachel Reeves, will be increasing taxes in the Autumn Budget.
Some think tanks have suggested that tax rises are inevitable, given the scale of the numerous challenges facing the economy. The Resolution Foundation said she might need to announce rises of £26 billion to plug gaps in the public finances.
In anticipation, some investors have already taken pre-emptive measures. In a recent survey of 2,000 adults conducted by Opinium, 23% of higher-rate taxpayers said they had topped up their pensions. This compares with just 8% of people overall. Pension top-ups are seen by some analysts as a shrewd move for people at the top end fearing a tax relief raid. The same survey also found that more people have been turning to Cash Isas and Stocks and Shares Isas.
Financial advisers have warned that anyone aged over 55 taking their tax-free cash (TFC) ahead of the budget could be jeopardising their longer-term security. People in this position could compromise their tax efficiency and leave themselves exposed to dividend tax or capital gains tax. People intent on reinvesting into their pensions at a later date may find themselves at risk of pension recycling rules and additional tax bills.
Experts have also urged those concerned about inheritance tax to be cautious. If you are looking to give money away to loved ones ahead of potential ‘gifting’ caps, you might also face cash shortfalls in later life.
