Potential Tax Changes After COVID-19 Pandemic Focuses Minds On Planning Futures

With life continuing to be turned upside down by the COVID-19 pandemic many people are taking a close interest in their tax position as the financial year nears its end, writes Nigel Round, Managing Director of Abacus Wealth Services.

And Abacus Wealth Services has the experience and knowhow to help clients understand their situation and make the most of the opportunities available to them as they prepare for the long-awaited economic recovery after lockdown.

Securing your financial foundations and ensuring your money works as hard as can be for you and your family will not only give you peace of mind, but it will also help prepare for any future changes to the UK tax system.

With public finances needing significant replenishment, media speculation has grown around which options available to Chancellor of the Exchequer Rishi Sunak will be used to restore the coffers.

The decisions ahead of the Government will have a big impact on businesses and individuals. Change is inevitable and among the areas which need to be considered is capital gains tax (CGT), put simply as the tax on the profit when you sell an asset covered by CGT that has increased in value. For most people this is property, shares or trusts and business assets.

To be forewarned is to be forearmed so we work with clients to assess capital gains made over time and advise on any allowances available to them before the end of the financial year on April 5.

This can include the allowances for a husband and wife and opportunities to phase decisions to make beneficial changes over different financial years. The team at Abacus Wealth Services are experienced in this area and can help guide you through the many considerations that may help.

Pension allowances also need to be considered, allowing individuals to contribute up to £40,000 a year towards the time when their working lives come to an end. These allowances differ for private individuals employed by a company and private limited company owners, so advice is essential.

Making the most of your tax-efficient Individual Savings Accounts (ISAs) can be an opportunity overlooked by some. You can put up to £20,000 per year into an ISA and with interest rates remaining at historic lows, there has been higher take-ups of the option to invest in stocks and shares ISAs.

With digital providers offering low charges for individuals to manage their own portfolios and make decisions about their investments, many choose to go it alone.

At Abacus Wealth Services we advise clients on the implications for the long term of trying to make the best choices to see your money grow. If you value your money and cannot bear to see investments fall in value professional advice can make a big difference.

An ISA with active investments, where expert managers are responsible for its performance, may carry higher fees but its returns can be significantly better than tracker or other “passive” funds which have much less management.

The value of an investment with St James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested. An investment in a stocks and shares ISA will not provide the security of capital associated with a Cash ISA.

The levels and bases of taxation and reliefs from taxation can change at any time and are generally dependent on individual circumstances.

With all your tax considerations, the best starting point is to understand your objectives and what you want to achieve in the short and longer term. Colleagues at Abacus Wealth Services are experienced in working with clients at every stage in life in organising their tax position to work to goals. To get started, this guide will help:

Starting with a no obligation discussion to understand your situation, we work with you to look at how your tax decisions fit your financial outlook and prepare plans to help along the way.

Being confident in the options available is a major step towards securing your future. And if the COVID-19 pandemic leads to big changes to the UK tax system, you will be better prepared for the future. To get in touch, click here:

Abacus Wealth Services Ltd is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the group’s wealth management products and services, more details of which are set out on the group’s website