AJ Bell press comment – 17 November 2022
Mark Rendle, head of marketing at AJ Bell Investcentre, comments on the impact of today’s Autumn Statement:
“Today’s Autumn Statement was packed-full of tweaks that are designed to boost the Treasury tax take. Changes to the dividend tax allowance and capital gains tax are hugely significant for those with accumulated wealth, and will see the taxman take a growing share of private wealth to help plug the gap in the nation’s finances. The same goes for the extended freeze on the IHT nil rate band, which will see more families needing to think ahead about their legacy planning in order to mitigate the impact of death taxes.
“For clients this ultimately means more tax to be paid on their investments, but it also means it is a time when advisers can exhibit the exceptional value they bring to clients by helping them navigate the UK’s labyrinthine tax system.
“Making use of tax free allowances is always a key part of the adviser toolkit, and today’s announcement will help to amplify the critical importance of effective planning.
“Many people with capital they want to preserve for the benefit of themselves and their family will now need extra support to understand how today’s changes impact on their personal financial situation. Upcoming changes to the Dividend Allowance and the Capital Gains Tax Annual Exempt Amount, as well as income tax for the highest earners will all have a significant impact.
“The government’s estimates published today suggest the CGT reforms alone will raise around £440 million a year by 2027/28, highlighting the massive scale of this tax raid on client’s wealth. Advisers will be working hard to support their existing clients through these changes, but this should sharpen everyone’s senses to the importance of careful planning and drive more people to pick up the phone and seek the help of a financial adviser if they don’t have one already.”