Rather than rehash everything that will be in the headlines, I thought it might be helpful to concentrate on a few of the things in the BudgetSorryAutumnStatement that will affect our actual clients most. The amount you have in dividends has gone from £2,000 to £500, which means that, if you have investments in shares worth more than £30,000-odd not in ISAs or pensions, you’re more than likely to have to pay extra tax on the income, even if everything is reinvested. From a practical point of view, that means a lot of people who don’t currently complete a tax return will have to start. I’d guess many thousands won’t know they have to, unless someone like us tells them; and of those that do, lots won’t be able to tackle the everything-online system. The Capital Gains Tax allowance be halved next year and quartered the year after. so we’ll have to be careful about which investments we use for money, again, not in ISAs and pensions. As expected, IHT allowances have been frozen which, with inflation, makes a nonsense of Gorgeous George Osborne’s pledge to let us all pass the value of our homes onto the kids. The markets, at whom all this was aimed, barely raised their noses out of their gin and tonics in reaction. And the (vaguely) good news (for me, anyway)? Electric cars won’t be taxed until 2025; by which time my lease will be up and I can stop saving the planet. Great.
“The true impact of inflation on cash savings and pensions”
Leaving your money in the bank or building society has always meant that its ‘real value’ after inflation will go down. Although rates go up to, supposedly, control inflation, any chart you look at will show that, apart from a few very short-term blips (N Lamont, I’m looking at you) they are never more than inflation.