Most importantly, the key message is to think sensibly about your finances and not be panicked by the possibility of tax changes. Planning for your wealth will often go hand-in-hand with planning your family’s future – so often the best guidance is not to do anything rash.
Today, families may be worried about taxes on finances or assets, but selling an asset quickly may mean you do not receive the full value you had hoped to achieve when you bought it. And, realising a sale may mean you fall within another tax threshold elsewhere.
What most of our clients fear are changes that come into effect at midnight on Budget day. For all the most significant reforms, people will be well informed and know what is coming as there will be a long consultation process before these policies are implemented.
They’re not designed to catch people off guard – although sometimes there are anti-forestalling rules to stop people taking advantage of gaps in the law that Parliament did not intend.
For example, the concept of a general wealth tax has been ruled out by ministers and it’s very, very difficult to apply a value tax overnight. So, remember that very few things in the Budget are sudden in effect, there is debate in Parliament until the law is passed, which can take many months.
For a number of our clients, the possibility of change is helping them think about what they want to do with their wealth and encouraging them to put plans in place.
For example, if you are considering gifting a sum to a child to help with a house deposit, you may want to do it sooner rather than later. But be aware it’s often best to plan around your goals rather than tax per se. You still need to ensure the person receiving the money is ready for the wealth and understands its implications and the mutual wealth goals you may have as a family.
