10th March 2022
The terrible events in the Ukraine have caused ripples across the globe. From a personal perspective, the suffering and hardship of all people involved in the conflict will no doubt be very much in the thoughts of us all. Many of you will also have been hearing of the impact that the conflict has had on European and world economies.
It means that this month’s Spring Forecast may include some announcements that we do need to take notice of. The Chancellor of the Exchequer will be opening his red briefcase on 23rd March 2022, when we’ll know how much of what we earn, own, sell, and spend will need to be paid to the Government ongoing.
Is it all doom and gloom? Well, while the macro environment may be framing our mindset one way, one defence we can all use is our ‘present’ behavioural bias so that we value and maximise what is ‘in front of us today.’ For many the Spring Forecast will mean less spending power in real terms. There are, however, defences to use to balance that feeling of loss you might feel when the reality of these tax changes hits your pay packet in April.
Please remember there are a range of tax allowances and shelters which are legally and ethically available for you to use today. You do not need to be a celebrity using complex offshore tax havens and schemes!
Simply put, if an asset (or liability) is not ‘held’ correctly it can mean losing money unnecessarily to the taxman and reducing returns. Get the tax status wrong by accident and the tax charges are double digits (10%, 20%, 40%, or even 52%!) – and this impacts the ‘average’ person in the street, not just the super wealthy!
The starting point is to ask the question, “because of any Spring Forecast changes, are you and/or your partner’s hard-earned savings, investments and assets impacted by way of:
Three sense checks:
In this context, ‘right name’ means, is the asset held in the right name at the time the asset is to be needed and distributed? This could be as simple as ensuring:
Have you placed you and your partner’s savings, investments, and assets under an appropriate trust to:
Are you and your partner’s savings, investments and assets held in single names, jointly owned or (and please forgive the jargon), cross proposed? You and your partner could be missing out on making use of your joint allowances, where they are applicable.
Are you and your partner’s savings, investments and assets in the right tax shelter allowing you to:
The above might seem complicated and often people only get the full job, half done. This is where a professionally qualified adviser can help make sure you do not miss out on the financial planning opportunities which exist.
What may have been right last year may not be now due to the Spring Forecast, so please take time out and check.