View more on these topics

Wide-ranging tax shake-up feared in Green Budget

The Government is expected to deliver a major shake-up of capital gains tax, inheritance tax and higher-rate tax relief on pensions in next week&#39s Green Budget.

The consultative document to be outlined by Chancellor Gordon Brown is likely to have radical implications for best advice given by IFAs.

The proposals will form the basis of the next Budget but Brown is unlikely to backdate changes to the date of the Green Budget. Industry experts predict this will spark a rush by IFAs to take advantage of the current rules.

Brown is understood to be aiming for a clampdown on inheritance-tax avoidance. Many IFAs and life offices fear that potentially exempt transfers will be ditched.

Pets allow a gift to be made during the donor&#39s lifetime which is exempt from IHT if the donor lives a further seven years. Married couples could also be barred from making gifts to each other.

Higher-rate tax relief on pension contributions could also face the axe under the Green Budget&#39s proposals. IFAs are concerned that this will reduce the attractiveness of pension schemes further following Brown&#39s decision to scrap tax credits on dividends in his last Budget.

Charlwood Leigh director Nick Barker says: "I cannot see how he can abolish higher-rate relief. It would make pensions even less attractive. Higher-rate relief is a good incentive to bring many people into pensions."

Capital gains tax could also face an overhaul with a new two-tier regime being introduced. Autif believes this could penalise short-term investments such as Oeics and unit trusts with a higher rate of tax.

Scottish Equitable technical sales manager Richard Leeson says: "The moves will alter the way that IFAs advise high-net-worth individuals. There must be a consultation process."


Insurers should be licensed to sell drawdown

I note that it is suggested that IFAs must get yet another qualification in order to sell drawdown products. But I would suggest this is more necessary for the insurance companies which have various traps for the unwary in negotiation of this contract. 1: The infamous question of critical yield. I have never seen such […]

Jupiter trust offers Asia and US funds deal

Jupiter Asset Management is offering a fully Peppable global unit trust which gives retail access to Jupiter&#39s Asian and US funds for the first time. The offer period on the global opportunities unit trust runs from January 27-February 16. It is priced at 50p, with a discount of 1.5 per cent for lump-sum investments of […]

Why IFAs need bonus details

Do annual bonus declarations on with-profits funds tell us a great deal about recent investment performance? Annual bonus rates this year are likely to remain unchanged or fall because yields on gilts and equities have fallen. This provides relief for actuaries as financial reserves are replenished. UK pension investments, including those supporting with-profits, will show […]

Candidates announced for Sofa election

IFAs Gary Jefferies and Maureen McKenna are standing for election to the board of the Society of Financial Advisers. Details of the annual general meeting sent out to members last week show that the two IFAs have put themselves forward for election at Sofa&#39s AGM on November 27. A gap on the Sofa board has […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and thought leadership.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm