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Heron House urges investors to review tax planning ahead of election

South-Wales based Heron House Financial Management says investors should review their tax planning ahead of a potential post-General Election clampdown. 

Financial planning expert Saran Allott-Davey says the need to raise more tax may lead to far less generous rules on capital gains tax, inheritance tax and tighten the treatment of widely-held investments such as bonds.

She believes the £10,100 CGT allowance and the 18 per cent level were vulnerable to change and the IHT exemption after seven years could also look overly generous to the new regime.

She says: “Once the election is over there is almost certainly going to be a tightening of tax policy. In just a few months many people may be pleased to have taken opportunities while they had the chance.”

Allott-Davey highlighted investment bonds as an area to review.  She says: “These have been sold to millions of people on the basis of the tax deferral on withdrawals from the policy, but this is deferral rather than total avoidance.

“The clear risk is that people could actually be deferring to a time when taxation levels are far more draconian which could wipe out much of the original benefit.”

She says possible a possible strategy to remove potential tax liabilities includes assigning policies to other family members if the income or capital is no longer needed. 

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