Aifa says IFAs will get a Budget "boost"
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The Association of Independent Financial Advisers says the cuts to the rate of corporation tax will give the IFA sector a “boost”.
Aifa director of policy Andrew Strange says: “This is a tough budget for tough times. The cuts to spending and benefits will be felt by all and impact across the economy.
“The reduction in the headline rate of corporation tax is good news for IFA businesses. The further reductions over the next three years, in addition to the lower tax rate for smaller firms, will also provide a timely boost as the advisory profession seeks to recover and grow.”
Strange says confirmation of a consultation to end the effective obligation to purchase an annuity by age 75 from April 2011 is a positive step.
But he warns: “We must be careful to balance the interests of those in retirement, to continue to benefit from advice and appropriate non-crystallised arrangements, against an appropriate sustainable tax strategy for UK plc.
“Many experts believe that there is an optimal age for an element of compulsory crystalisation in peoples’ early eighties, and so caution should be exercised. It does though bring into focus the importance and value of advice throughout retirement.
“Whilst a proposed reduction in the annual pension tax relief allowance may be a blow to a few, overall it is far more positive than a cut to the actual rate of relief. This should encourage regular pension planning and supports those who are saving for their retirement.
Strange added that the Chancellor has listened on CGT and the increased rate for higher taxpayers is “not as draconian as feared”.
He says: “With the new rate coming in at midnight tonight investors should consider financial advice.”
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