GBI Magazine is back with the latest discussion on the influential topics defining and impacting the tax-efficient investment space. We once again aimed to find out more about our readers’ thoughts and views by gathering your opinions on a range of topics dominating both advisors and clients considerations right now.
Tomorrow, October 30th, the highly anticipated autumn budget finally arrives and will dominate our headlines as it is delivered by Chancellor of the Exchequer Rachel Reeves. With the budget being the main point of focus this week, we’ve aimed to gain a closer insight into advisers thoughts on some of the changes and impacts the announcement could have on their clients, along with what they’re keeping a close eye on.
Industry professionals have since shared their insights, and the questions along with the results can be seen below.
1) Which potential inheritance tax change do you think would have the greatest negative impact on your clients?
There is currently no set in stone definite direction that the government is expected to proceed with in regards to IHT changes within the autumn budget, however, there are a number of outcomes and changes that are a possibility for change. Advisors have shared their views on some of the greatest negative impacts that they believe could impact their clients. The top two stand out possible ramifications based on the results of the question are tweaks to business relief (including AIM shares) with 78.6% of participants selecting this to a cause for concern, participants also stated that they feel that making pensions to subject to inheritance tax will influence clients negatively, with a percentage of 35.7%.
2) How are you preparing clients for potential inheritance tax changes that may be introduced in the Autumn Budget?
Advisers have been keeping a close eye on the potential IHT changes that may be implemented as part of budget in order to best prepare their clients, and largely dominating attention are the changes that could affect pensions. As the results of the question above determined, advisors are already skeptical about the government making pensions subject to inheritance tax. The large focus on pensions is also supported within the findings of this question, with the vast majority of participants (78.6%) advising that they are informing clients on pension planning adjustments. The possible changes to pensions could include a state pension increase, tax free cash being much more limited, and a reduction within pension annual allowance along with other factors. It is clear that pensions are a high focus point of the autumn budget for advisors and clients alike. With uncertainty still in the air, 35.7% of participants voted that they are taking a more cautious approach and holding back on making any changes or preparing advice until the announcement has been made, with 21.4% of participants stating that they are encouraging their clients to use their business relief/AIM investments now, before any major changes may be implemented. The remaining participants of 1.7% advised that they are suggesting that clients make gifts sooner rather than later, also taking a much more forward approach in the event that we see considerable implantation of changes.
3) What is your biggest concern about the potential inheritance tax changes in the Autumn Budget?
Whilst we know there is a substantial degree of uncertainty around tomorrow’s budget, advisors have pin pointed some areas of major concern which includes potential inheritance tax changes and what this could mean for their clients going forward. When looking at the results of this question, a huge majority of participants shared that their biggest fear is that there could be major uncertainty for clients long within term financial planning, 57.1% in fact stated that this is a concern that could largely dominate their decision making process. 35.7% of participants also stated that negative impacts on business continuity or family owned businesses are a worry, with an equal amount of 21.4% stating that increased complexity in estate planning, along with a discouragement of pension savings is something that is causing apprehensiveness.
Only the announcement tomorrow can answer any lingering questions that may be leaving feelings of uneasiness and uncertainty, we will be bringing you all of the latest autumn budget news from midday.
We would once again like to say a huge thank you to each and every one of our readers who shared their views with us, we highly value being able to gain insight into our readers thoughts on many of the factors influencing our industry. Be sure to keep an eye out on GBI Magazine for our next discussion!
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