Changes to pension lump sums and CGT are the Budget measures that would cause the biggest disruption to existing client plans, according to a new poll of advice professionals conducted by abrdn, days before the Chancellor reveals her budget plans.
When asked what changes would cause the most issues, more than half (55%) of respondents to the abrdn survey cited cutting the pension tax-free lump sum, even assuming reliefs would apply to protect those who had already exceeded the new level.
Respondents also voiced concern over the disruptive potential of increasing CGT rates, potentially towards income tax levels (40%), and reducing the CGT or dividend annual allowance further (35%).
Just under a third (31%) said removing the CGT exemption on death, while just under a quarter (23%) pointed to removing or reducing IHT reliefs.
Alastair Black, Head of Savings Policy at abrdn, said: “With the Budget looming and talks of potential changes to savings, investment and tax policy swirling, the stakes have never been higher.
“Any changes to policy can be disruptive, but it’s clear the sector is concerned that some will cause more fundamental disruption than others. We hope that, for any significant policy changes, the government will also include transitional reliefs to help manage the impact, as others have in the past, and provide some breathing room for adjustments in planning.”
abrdn’s survey also asked advice professionals what areas they would like to see the Chancellor focus on to support the operational health of their businesses.
Two-thirds (66%) said increased funding for apprenticeships, while a similar proportion (64%) wanted more generous capital allowances for investment in their offices and equipment.
Respondents also said they’d welcome measures to support investment in team training (51%), with more than two-fifths (43%) seeking a reduction in Corporation Tax.
Alastair Black added: “Ultimately, clients seek peace of mind, and for advisers to provide that assurance, they must be confident in their business’s operational stability to weather any storm.
“This year has already presented advisers with relentless economic headwinds, political uncertainty and significant policy shifts, leading to capacity crunches that strain their operations.
“Given the government’s desire to support growth in the economy it’s in their interests to support the advice sector – both in terms of growing that part of the economy and given that advisers encourage individuals to invest.”
