The Autumn Budget 2026: Post-Budget webinar

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Good morning, and welcome to our post-budget webinar.

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Well, we've had eight chancellors over the last 10 years, and the eighth, John

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Healey, has now delivered his 2026 autumn budget.

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Of course, the big question from here is what the announcements could mean for you,

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your family, or your business. Unlike last year, where the lead-up to the budget

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was rife with speculation, this year we've seen far less in the way of rumors and

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leaks over the past couple of months.

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Now, in many ways, that's not a huge surprise given the lack of major big policy

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changes, but there's still plenty to cover in today's session.

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For entrepreneurs and business owners in particular, there's a number of details to

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look at, some tax increases for landlords and savers, and also a range of

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announcements from previous budgets which are coming into force very soon.

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And joining me are four specialists who will give unique perspectives to

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the discussion. Gemma Helliwell, chartered financial planner, Irene Wolstenholme,

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director of wealth,

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James Purcell, managing director of investments, and Rachel de Souza, tax partner

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at RSM. Thank you all for joining us. Good

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morning. A pleasure indeed.

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Pleasure to be here.

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Pleasure to be here. Right. Now, we will spend most of this session discussing the

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announcements and the potential implications.

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At the end, though, we're going to take your questions.

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So there should be a QR code on the screen somewhere, so get your phone

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out, get the QR code, follow the prompts, and send your questions in, and we

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will be discussing your questions right at the end.

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So

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actually get your questions in, and we will take them at the end. Right.

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So before we dive into the detail, because there's been a lot of little tiny

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announcements. I think it's the largest amount of policy changes that any

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chancellor has announced, but they're all really quite, in terms of fiscal impact,

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relatively small. So

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we get the details, we all start poring through the Red Book, but before that, I

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want to go through your main messages, your key takeaways.

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So first of all, Gemma, what's your sort of key takeaway?

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Yeah. So I think if you were looking at the headlines this morning, you'd be

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forgiven for thinking that the chancellor's delivered four separate budgets, and

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they're all beautifully alliterative.

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So we've heard that it's a bold budget on the one hand.

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Okay.

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We've heard it's a boring budget. We've heard it's a small beer budget, and we've

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heard it's a breathing space budget.

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Okay. And it's that breathing space, I think, that I'll be focusing on with my clients.

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The fact that some of the large announcements that we could have seen haven't

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actually come to fruition this year.

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So I'll be asking clients, I think, first of all, to really understand the changes

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and make sure they understand the detail before they take action, to revisit their

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financial roadmaps and consider the context really for their families and for their

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longer-term journey. And then thirdly, to remember that there are always planning

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opportunities available, happily, for me as a financial planner.

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So it's important that you think about the longer term, and you really understand

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that context before making any knee-jerk decisions off the back of this budget.

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Rachel, this is obviously your time of year.

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It

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is. As a tax accountant, you must love budgets.

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What are you most paying attention to?

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Well, again, it's interesting hearing what Gemma's got to say because it's quite

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similar when you're looking at tax in isolation.

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This budget is really is a something or nothing budget.

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It's marked by we had minimal speculation.

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But the speculation that was there, a lot of those fears have not come to pass, and

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a lot of my clients certainly will be very happy about that.

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So we'll be having those more discussions with those people saying, "It hasn't

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happened. What do we do now?" And then it was just looking at tinkering around the

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edges. You mentioned entrepreneurs in your introduction.

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There is something there, and I know we're going to come on to look at the detail.

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It's not as good as it sounded. So again, beware of the headlines, look at the

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detail, look at the longer term for your own personal position, and take the

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appropriate advice to get you where you need to be.

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James, markets were pretty muted yesterday.

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Sterling, the government borrowing market gilts, and the stock market.

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From the perspective of markets, the economy, and investors, was that reaction

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right?

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The short answer is yes. I think the remarkable thing was there was very little to

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be remarkable about.

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Mm-hmm.

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So as a result of that, I think it's a great reminder that we should be thinking

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about financial markets in terms of the long-term drivers.

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And the long-term drivers aren't normally politics or short-term fluctuations.

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It's things such as long-term economic growth, the ability of corporates to grow

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their earnings, potentially fiscal and monetary policy as well.

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And all of those conditions, of course, are multi-year conditions that aren't

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impacted by a budget or any other short-term political event.

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So it's a good reminder to us that we need to stay focused on the long term.

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And actually, if we over-focus on short-term fluctuations, we risk actually not

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investing or staying out of the market, and that can harm our long-term financial

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plans far more than the short-term fluctuations of politics.

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And Irene, about, again, we've just heard that the budget may not have included

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quite so much. What are you getting your teeth into?

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And sort of like people passing on their wealth through generations.

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What

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grabbed you?

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So from this particular budget, I think we need to add to all your alliterative

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ones, just a sort of do no harm budget.

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It's a relatively quiet one where it is harder to get one's teeth into than

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some of the previous budgets. However, some of those previous budgets have still

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got ramifications that are going on.

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A lot of the things haven't actually started happening yet, in particular, some of

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the pension inheritance tax changes.

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So I think one of the good things about this budget is that it does just give us

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breathing space to be able to think about what the planning should be and to put in

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place something that is appropriate without everything having changing every year.

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So James, we also get with the budget, as soon as the

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chancellor sits down, all of the forecasts come out, right?

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So the Office of Budget Responsibility came out with its economic forecast, and

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then we all get the detail from the Treasury about everything that's been

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announced. From the forecast in terms of economics and interest rates and

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inflation, where are you seeing-- What did the OBR say?

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So

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give us a sort of summary.

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Of course. So the OBR upgraded 2026 GDP for the UK, and that's of course a good

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news story. But they did also downgrade 2027, and that's telling us that we remain

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in a fairly muted economic growth environment for the UK and indeed much of the

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developed world. I think it's interesting, though, to compare that the OBR

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upgraded, much like the IMF did two weeks ago, and the International Monetary Fund

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upgraded the 2026 UK GDP on the basis that AI productivity seemed to be coming

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through at a stronger rate- Mm.

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Yes ... than in other countries.

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Mm. And as we all know, economic growth fundamentally either needs more people working,

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or it needs those people to be more productive.

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And given the demographics in the UK, it really is the productivity piece that

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holds the key to the medium-term economic prospects of the country.

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So that, I think, is great to see from the IMF two weeks ago and reinforced, of

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course, by the OBR yesterday as well.

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And two interesting things on that is the OECD has done a study on the impact of AI

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on productivity, and it said that countries who have

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very dominant services industries

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could see a big impact from AI adoption.

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And that is, of course, what the UK has, right? Big services industry.

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Absolutely. And I think the narrative around AI has changed this year.

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The first quarter of the year from a financial markets perspective, people were

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quite worried about what AI meant for the services sector and the software sector

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as well. You look at how share prices have performed since then, a lot of those

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sectors that were

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sort of threatened by AI, now people are thinking that actually AI is an enabler of

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those sectors. So we are beginning to see that turnaround.

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It's probably good news for the UK economy over the medium term.

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But again, this is not something that we see play out in a budget.

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It's something that we're going to see play out in the months and even years to

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come.

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And obviously, the other big one is the oil price has been moving up towards $120,

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inflation, and interest rates. And again, we've got the most recent up-to-date

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figures from the OBR, and of course, next week we've got the Bank of England

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meeting to decide on rate rises, and pretty much a rate rise is baked in.

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What are your thoughts around those things as well, and maybe even sterling?

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So I think, as you mentioned, there's a property implication here as well.

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The UK property market is far more likely to react to the cost of capital, i.e.,

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what is the Bank of England base rates and what are the mortgage rates that drive

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off them than they are to react to the budget.

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So I think, again, if we're looking from an investment perspective, whether we're

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looking at sterling or whether we're looking at property, we're probably more

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focused on next week and the signaling for the future path of interest rates than

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we were on the events of the budget.

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Okay. Let's now move on to personal tax savings and investment income.

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Now, there were no new changes to headline income tax, national insurance, or

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dividend tax rates. However, from April 2027, we've got this tax on savings

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and property income is going to rise by a further two percentage points across the

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bands, and that's on top of an increase already announced.

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So Rachel, how do these work and who is likely to feel the most?

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So yeah. So let's be clear about what we've got.

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We've effectively got 4% increase in the tax on rental income, net rental income,

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and savings income, not dividends, coming into effect from April next year.

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So it doesn't matter which band of the thresholds you fall into.

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If you're in a 20% band, it's 24%. If you're in the 40% band, it's 44%.

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If you're in the 45% additional rate, you're going to be paying 49% on those

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sources of income. So of course, it affects the landlords, and it affects people

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who are savers, with interest income.

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It hasn't affected the dividend rate, as you have mentioned.

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And broadly, that's because when they put their rates up last year, or they

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announced the rate changes last year for dividends, they've got to the maximum they

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can get to without effectively really increasing that rate when you take into

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account the combined fact that profits of companies are taxed, and it's those

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profits that then form the dividends, which are then taxed again.

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Taxed again.

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Exactly.

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Double taxation.

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If not even more.

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Gemma, so financial planning,

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significant if you're a high rate taxpayer now, significant increase to the amount

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you pay, particularly if you're a buy-to-let investor or got savings.

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What does it mean for you when you sit in front of clients?

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Yes, you're quite right. The people that this will affect most are those with

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material cash savings, as Rachel touched on, and people that receive a rental

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income. And it might feel particularly because they've sort of snuck it in as 2%

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and then 2%, rather than a headline 4%.

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It might feel like it's a relatively small figure.

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But that does have an impact over time, particularly when you take that in

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partnership with frozen thresholds, those cliff edges around £100,000 of income,

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for example. This really builds up, and it does have an impact on your financial

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plan. So I think what I will be speaking to clients about after yesterday is to

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really be clear what your cash is for. Cash is incredibly important.

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It's vital that you have a really strong cash reserve because that then enables you

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to take those medium and longer-term steps to make your plan work on your journey.

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So really understand what your cash is for.

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Make sure that you are making use of the tax wrappers that we do have available to

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us. So happily, we still have our £20,000 of ISA allowance-

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Cash ISA

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... which we've seen, yeah, moving forwards.

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We've also got pensions, and we'll talk a little bit more about that later on.

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It might be worth, Rachel, you mentioned around dividends there.

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There's also capital gains tax we didn't hear any changes to.

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Yep. So you can effectively arguably have half-price tax-

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Oh

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... with capital gains compared to some of the rates that we're seeing under the

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savings. So I think considering how you hold your assets will be really important.

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But sitting behind all this is the message that you mustn't panic.

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This is not a panic budget, as we spoke about at the start.

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And I think to make the right move, given that some of these changes aren't coming

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in until April 2027, firstly, understand your circumstances,

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really work on what your objectives and goals are, and perhaps most importantly,

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what your attitude to risk is before you start making changes to anything.

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And you mentioned the cash ISA limit is not going to be reduced to 12,000.

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He's reversed that idea from Rachel Reeves. It's going to stay at £20,000.

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Also, we announced changes to the LISA, a potential new

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first-time investing ISA.

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LISA.

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So there's quite a few things going around ISAs.

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What's your sort of conclusion from what was announced yesterday?

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So I think the conclusion is they've moved from perhaps the stick approach of

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trying to push people towards investing by saying let's lower down that cash

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threshold to something that's a bit more looking like a carrot-

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... and trying to encourage a benefit of actually investing.

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So that I think is a good thing. But I would echo the point that actually having a

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suitable amount of cash reserve, a liquidity buffer, if you will, from our

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experience, it then gives people the confidence-

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It does

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... to invest other assets or excess cash-

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High risk

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... in high-risk securities to generate a return over the medium to long term.

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So I don't think it's a bad thing to hold cash in an appropriate amount.

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The key, of course, is making sure that's proportional to your needs and that you

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are making your entire wealth work for you in the right wrappers and in the right

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asset classes.

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Irene, when families hold savings and investments in different ways, what

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structuring questions might be useful to raise?

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So this is the sort of thing where we have to start saying, "What's your aims?

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What's your cash here for?

237

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How do we want to split it among the family?

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How much are we thinking we're going to need now or in the very near future?

239

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How much actually is more for generational wealth?" That sort of thing.

240

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So it really is a big holistic question overall.

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So we do see people talking about things like splitting between husband and wife

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or married people in general. We do see people talking then

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about thinking about structures such as trusts, such as investment bonds, such as

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companies and so on. Each of those have a different risk profile and a different

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tax profile and a different profile as far as handing things down from the

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generations. So a lot of the work I do ends up being things like,

247

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"Why have you got this money? How actually will this help you and your family in

248

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the future? What do you want to do with your money?" So there's absolutely not

249

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one-size-fits-all with these things.

250

00:16:13,842 --> 00:16:19,092

Okay. Now, some of those listening to this call will be entrepreneurs and business

251

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owners.

252

00:16:20,141 --> 00:16:23,532

Yes. And there were a number of changes there as well.

253

00:16:23,682 --> 00:16:29,053

So from April 2027, the lifetime limit for gains eligible for

254

00:16:29,142 --> 00:16:34,692

business asset disposal relief. So essentially, you sell your business, the

255

00:16:34,722 --> 00:16:36,702

government says you have to pay tax on it all, right?

256

00:16:36,762 --> 00:16:40,123

So that's basically what it is. I think it used to be called the entrepreneurs?

257

00:16:40,303 --> 00:16:42,672

A long time ago, it was entrepreneur's relief.

258

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Yeah. And then it got changed to the business assets disposal relief, or BADar.

259

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Depending on your-

260

00:16:50,083 --> 00:16:51,432

So you've aimed it, BAD.

261

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Yeah.

262

00:16:52,692 --> 00:16:55,123

I love these treasury terms. It's like, why can't they just say what they mean?

263

00:16:55,752 --> 00:16:58,123

Anyway, so that is going to fall.

264

00:16:58,211 --> 00:17:02,983

Yeah. So business BADar, business asset disposal relief, is going to go from a million

265

00:17:03,042 --> 00:17:04,752

pounds down to half a million pounds.

266

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Yeah.

267

00:17:05,113 --> 00:17:09,583

But the government, Chancellor Healey, announced a founder's relief, so we've got

268

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something different. Is it in addition to the BADar?

269

00:17:13,032 --> 00:17:16,602

Well, it doesn't look like it is, no. So there's going to be a consultation on it.

270

00:17:16,662 --> 00:17:21,672

So what we know at the moment, an initial reading, just of the summary documents,

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suggested that this was almost going to be a replacement for the BADar, almost like

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00:17:27,222 --> 00:17:31,902

the entrepreneur's relief. Now, entrepreneur's relief applied to £10 million of

273

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gain. Founder's relief is going to apply to 10 million pounds of gain.

274

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So you're thinking, "Oh, this is actually quite a good relief." Then you start to

275

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get into a little bit more of the detail because it's very, very specifically

276

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targeted on high-growth companies.

277

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So you've got to have been a founder or a very early investor, broadly an

278

00:17:56,562 --> 00:17:59,562

investor with 25% of the shares-

279

00:17:59,803 --> 00:17:59,892

Oh

280

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... at the time the company starts to trade.

281

00:18:02,982 --> 00:18:03,192

Oh.

282

00:18:03,792 --> 00:18:05,173

So yes. So now we've narrowed it down.

283

00:18:05,201 --> 00:18:07,662

We're narrowing it down. Who's getting it, right? Keep

284

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going. There is further conditions.

285

00:18:09,102 --> 00:18:09,402

Okay.

286

00:18:09,582 --> 00:18:12,612

The company has to have traded for five years.

287

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Okay.

288

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The individual investor has to have been UK resident for five years.

289

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Okay.

290

00:18:19,303 --> 00:18:22,902

So again, we're building up the layers of conditions on it.

291

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Right.

292

00:18:23,382 --> 00:18:27,492

And then, so those are you as the shareholder level, then we're looking at, well,

293

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what is this business? What is this trade? It's got to be high growth.

294

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And they've given three different measures for what high growth means, which is

295

00:18:36,763 --> 00:18:42,162

broadly, you've got to be growing by 25% per annum

296

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over a three-year period in order to meet the conditions

297

00:18:48,553 --> 00:18:48,912

to

298

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actually get this founder's

299

00:18:50,981 --> 00:18:52,332

relief. Yeah, to get this founder's relief, yeah.

300

00:18:52,392 --> 00:18:58,362

So it seems to me it is very much aimed at those sort of AI, we talked about

301

00:18:58,422 --> 00:18:59,172

AI earlier.

302

00:18:59,202 --> 00:18:59,472

Mm-hmm.

303

00:18:59,502 --> 00:19:05,022

Those AI businesses, those tech businesses, which definitely have that ability

304

00:19:05,412 --> 00:19:09,852

to do that huge growth because of the environment we're in at the moment.

305

00:19:10,452 --> 00:19:14,892

But that's not the trajectory for the vast majority, I would say-

306

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Of startups

307

00:19:17,021 --> 00:19:17,862

... in other areas.

308

00:19:18,282 --> 00:19:21,732

Do we know when it's coming in? Is it a consultation, or is it-

309

00:19:22,002 --> 00:19:26,382

There's a consultation on the detail, but it is due to come in April next year.

310

00:19:26,742 --> 00:19:28,182

So it's coming in very quickly.

311

00:19:28,212 --> 00:19:28,632

Wow.

312

00:19:29,172 --> 00:19:34,992

And again, it looks like if you have used business asset disposal relief, that

313

00:19:35,082 --> 00:19:38,803

amount that you've already used is going to be knocked off your 10 million.

314

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So if you've used business asset disposal relief at one million, you'll only have

315

00:19:43,122 --> 00:19:46,062

nine million potentially of founder's relief.

316

00:19:47,340 --> 00:19:47,700

Irene.

317

00:19:47,880 --> 00:19:52,830

Yeah. Some other things there as well about that, in that the company also has to

318

00:19:53,069 --> 00:19:54,631

have turned over at least 10 million- Yeah

319

00:19:55,139 --> 00:19:57,390

... and at least 15 full-time employees.

320

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And so it's going to be one of these things that, as Rachel says, it's going to be

321

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very specifically targeted. I've already had questions about will people wait until

322

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after April to decide to dispose of their companies.

323

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Will that to change what people are going to do in terms of disposal?

324

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I suspect there might be one. It really won't.

325

00:20:22,020 --> 00:20:26,700

It is not going to be that sort of issue because th- this relief is targeted very

326

00:20:26,790 --> 00:20:29,580

specifically at a very particular fact pattern.

327

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And if you fit into that fact pattern, absolutely wonderful.

328

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But I suspect there won't be an enormous number, at least not immediately.

329

00:20:38,400 --> 00:20:43,260

So, the implication for sort of succession or transfer of a business Founders

330

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Relief?

331

00:20:43,529 --> 00:20:47,820

Well, this will be... It's wonderful if you happen to fit into that.

332

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And it may well be that people in the future do try to make sure their business

333

00:20:54,240 --> 00:20:56,010

does fit into it. But it's quite hard to-

334

00:20:56,069 --> 00:20:57,690

Yes. Hire that 15th employee

335

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Hire that 15th employee. Yes.

336

00:21:02,580 --> 00:21:05,970

One other thing that it does also say is that the

337

00:21:07,230 --> 00:21:11,820

business mustn't, it must be fairly much what it was initially set up to be.

338

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So, you can't sort of start off being, I don't know, a tech business and getting-

339

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Starting-

340

00:21:16,649 --> 00:21:16,862

... into- Mm.

341

00:21:17,639 --> 00:21:22,560

Mm ... food or widgets or... Yes. So it'll be very interesting to see how much that's

342

00:21:22,650 --> 00:21:22,830

used.

343

00:21:23,280 --> 00:21:27,510

So Pro Growth budget, as the chancellor is,

344

00:21:29,100 --> 00:21:30,450

and Andy Burnham, new prime minister.

345

00:21:31,770 --> 00:21:36,720

Does this budget, are there enough measures in this budget to...

346

00:21:37,111 --> 00:21:39,390

aimed at encouraging entrepreneurs and startup?

347

00:21:40,290 --> 00:21:43,500

We've just heard there's quite a lot of restrictions on the Founders Relief.

348

00:21:44,220 --> 00:21:47,730

Do you think this is going to have a big impact on sort of the UK's investment

349

00:21:47,790 --> 00:21:48,301

markets?

350

00:21:49,140 --> 00:21:54,390

Not over the immediate term. If we think about even a venture capital backed

351

00:21:54,480 --> 00:21:59,850

company in the UK, the typical time from founding to actually listing on the public

352

00:21:59,910 --> 00:22:05,430

markets is eight to 10 years. So even if this was transformational, we are looking

353

00:22:05,430 --> 00:22:08,310

at a very long time horizon for it to impact public markets.

354

00:22:08,640 --> 00:22:12,270

Now, of course, private markets, and investing away from public markets, a

355

00:22:12,301 --> 00:22:17,460

different proposition. But in terms of public markets, even the most pro-growth of

356

00:22:17,551 --> 00:22:20,820

entrepreneurial budgets has a very long lead time to implementation.

357

00:22:21,000 --> 00:22:24,150

Very good point. Property and housing next.

358

00:22:24,390 --> 00:22:29,911

So the high-value council tax surcharge, another great name for the- Yeah.

359

00:22:30,059 --> 00:22:30,480

Another wonderful

360

00:22:30,599 --> 00:22:33,781

... another great name from the Treasury, otherwise known as the Mansion Tax- Mm-hmm

361

00:22:33,899 --> 00:22:35,220

... if you didn't know that's what it was.

362

00:22:36,840 --> 00:22:39,510

Did we get much on that, Irene? Did we?

363

00:22:40,051 --> 00:22:45,090

So we did have a little bit on that, although in practice, it's pretty much what

364

00:22:45,150 --> 00:22:46,500

you might have expected from last year.

365

00:22:46,560 --> 00:22:46,650

So-

366

00:22:46,709 --> 00:22:47,730

So we got some detail.

367

00:22:47,760 --> 00:22:52,410

We got some detail. So, this was announced in the budget this time last year.

368

00:22:52,560 --> 00:22:52,920

Of course.

369

00:22:53,250 --> 00:22:58,830

It comes into play in April 2028. So that's a two and a half year lead time,

370

00:23:00,029 --> 00:23:04,830

partly because of the difficulties just in valuing all the properties.

371

00:23:06,660 --> 00:23:11,310

The headlines are absolutely exactly the same as they were before, in that there'll

372

00:23:11,310 --> 00:23:16,710

be this high-value surcharge at the council tax level, leveled on

373

00:23:16,801 --> 00:23:21,240

owners for properties that are valued at more than £2 million.

374

00:23:22,500 --> 00:23:27,660

The thing that... There was a consultation basically, and the thing that came out

375

00:23:27,720 --> 00:23:30,121

this time was just the answers to the consultation.

376

00:23:30,390 --> 00:23:34,140

In particular, what happens if you have got this sort of

377

00:23:36,960 --> 00:23:40,680

income-poor resident in a very large house, should we say.

378

00:23:40,740 --> 00:23:41,640

Income poor, asset rich.

379

00:23:42,000 --> 00:23:47,760

That's the idea. And so the consultation basically suggested, and

380

00:23:47,790 --> 00:23:52,861

this is what seems to be happening, that if you come into one of three categories,

381

00:23:52,950 --> 00:23:58,920

so that's either household income of less than 35,000, or savings of less

382

00:23:58,950 --> 00:24:04,740

than 16,000, or disabled person main

383

00:24:04,770 --> 00:24:09,660

residence, then the high-value council tax surcharge won't be stopped at all.

384

00:24:09,720 --> 00:24:14,430

It will just be able to be deferred, and you'll be able to apply for that, not to

385

00:24:14,490 --> 00:24:17,730

be paid until there's a change of ownership.

386

00:24:17,850 --> 00:24:21,450

So generally on sale, but there may be other occasions.

387

00:24:21,960 --> 00:24:24,000

And there'll be some sort of interest charge.

388

00:24:24,301 --> 00:24:24,600

So

389

00:24:26,220 --> 00:24:32,070

it's a help to those who won't have to find the money immediately, but

390

00:24:32,611 --> 00:24:37,770

it is a deferral really. There's also a few things, people who

391

00:24:38,880 --> 00:24:42,900

will be exempt. For example, if you've got sort of care homes and that sort of

392

00:24:43,020 --> 00:24:44,280

thing, ballots and what have you.

393

00:24:44,760 --> 00:24:45,570

Mm-hmm.

394

00:24:45,600 --> 00:24:49,650

But I think most of those were things that you would sort of expect anyway.

395

00:24:49,890 --> 00:24:52,140

So I suppose it gives a little bit more certainty to what's happening.

396

00:24:53,010 --> 00:24:58,080

But as I say, it's not coming in any way until April '28, and this valuation

397

00:24:58,140 --> 00:25:04,051

exercise is going on and will take some time to complete and be sorted out because

398

00:25:04,111 --> 00:25:06,210

I'm sure there'll be quite a lot of disputes-

399

00:25:06,600 --> 00:25:06,781

Mm. Mm

400

00:25:06,839 --> 00:25:12,301

... particularly where houses are valued on one of the cliff edges, as it were-

401

00:25:12,420 --> 00:25:12,720

Mm-hmm

402

00:25:12,870 --> 00:25:13,621

... one of the thresholds.

403

00:25:14,070 --> 00:25:17,100

I think it's worth just also just picking up, of course, there was a lot of

404

00:25:17,190 --> 00:25:17,790

speculation-

405

00:25:17,820 --> 00:25:17,880

Yes

406

00:25:17,969 --> 00:25:20,700

... wasn't there, Irene? That it was going to come down to 1.5.

407

00:25:20,820 --> 00:25:22,230

That the floor would go down, yes.

408

00:25:22,290 --> 00:25:23,371

And that has now-

409

00:25:23,940 --> 00:25:25,021

That's not happened. Yeah ...

410

00:25:25,499 --> 00:25:30,030

so the floor is two million, and so it's for properties above two million that

411

00:25:30,090 --> 00:25:34,230

will be within this new charge from April '28.

412

00:25:34,950 --> 00:25:39,330

And I also just ought to mention that this is only in England, because this is a

413

00:25:39,420 --> 00:25:41,400

council tax surcharge, and they have...

414

00:25:41,851 --> 00:25:44,670

Council tax is devolved to the other governments now.

415

00:25:45,361 --> 00:25:48,571

Scotland have been looking to do a different way and adding extra council tax

416

00:25:48,630 --> 00:25:54,450

bands. So there will be similar things in the devolved governments, but this

417

00:25:54,780 --> 00:25:56,551

particular surcharge is an English thing.

418

00:25:57,301 --> 00:26:00,480

And obviously, property can be a large asset for some families.

419

00:26:00,810 --> 00:26:03,690

So Gemma, how does this, what we're seeing-

420

00:26:03,991 --> 00:26:04,260

Mm-hmm

421

00:26:04,320 --> 00:26:06,870

... impact on a household's financial plan-

422

00:26:07,170 --> 00:26:07,380

Mm-hmm

423

00:26:07,439 --> 00:26:08,760

... which has to include property, right?

424

00:26:09,120 --> 00:26:12,480

Yeah, you're right. It is a large asset, and you touched on that, Irene, the fact

425

00:26:12,509 --> 00:26:16,829

that people can be very asset rich and cash poor, and I think also property, the

426

00:26:16,890 --> 00:26:19,230

family home, it's a very emotive issue, isn't it?

427

00:26:19,738 --> 00:26:23,551

Mm. Some of the things coming out from the Conservatives are feeding into that around

428

00:26:23,611 --> 00:26:25,140

inheritance tax and properties.

429

00:26:26,760 --> 00:26:29,520

So I think this really does impact on people in many ways.

430

00:26:29,551 --> 00:26:33,301

So first of all, if you've got rental income coming in, it's going to have an

431

00:26:33,330 --> 00:26:36,601

impact on you, the fact that those rates are changing, and that is going to feed

432

00:26:36,660 --> 00:26:39,991

into your financial plan and needs to be taken into account.

433

00:26:40,500 --> 00:26:46,020

If you are affected by the high-value council tax surcharge, on the one hand,

434

00:26:46,530 --> 00:26:51,030

as a percentage of the overall value of that asset, it might feel like a relatively

435

00:26:51,090 --> 00:26:55,351

small amount, but we need to remember this is a permanent announcement, and it's

436

00:26:55,440 --> 00:26:57,120

index-linked, it's inflation linked.

437

00:26:57,420 --> 00:27:01,980

So it is going to impact, and it should be built into your financial roadmap when

438

00:27:02,010 --> 00:27:06,060

looking at your journey. And it doesn't mean, of course, that you should run off

439

00:27:06,090 --> 00:27:10,980

and downsize immediately or move to Scotland where it sounds like things may be

440

00:27:11,040 --> 00:27:16,140

slightly different. But it's about deciding from an informed place, I think, what

441

00:27:16,170 --> 00:27:20,880

the asset is. Is it your home? Is it an income source, or is it a legacy?

442

00:27:21,241 --> 00:27:24,630

And then how do you respond to that and build that into your journey?

443

00:27:24,991 --> 00:27:27,960

How do you deal with people on assets that are emotional?

444

00:27:30,059 --> 00:27:31,802

Do you know, it's a really good question.

445

00:27:31,889 --> 00:27:33,330

It's a curveball, I guess it is, right?

446

00:27:33,630 --> 00:27:36,930

Well, it's actually one of the most rewarding things about the job because you're

447

00:27:36,991 --> 00:27:40,440

on the journey with somebody, and what's emotional to them, it's important that we

448

00:27:40,500 --> 00:27:45,000

take really good care of for them. And what's emotional for one person might be

449

00:27:45,060 --> 00:27:49,230

very different for somebody else, which is where budgets become interesting, don't

450

00:27:49,260 --> 00:27:53,730

they? Because something that might upset one person might be a joy for somebody

451

00:27:53,851 --> 00:27:54,180

else.

452

00:27:54,330 --> 00:27:54,450

Yeah.

453

00:27:54,480 --> 00:27:57,180

And that's one of the wonderful things about what we do, isn't it?

454

00:27:57,630 --> 00:27:59,700

Helping people navigate those challenges.

455

00:28:00,390 --> 00:28:04,500

So James, I was looking at a Zoopla survey from a couple of days ago about property

456

00:28:04,560 --> 00:28:09,180

prices in the UK, and London and the Southeast has been quite badly affected with

457

00:28:09,241 --> 00:28:09,930

prices down.

458

00:28:11,880 --> 00:28:17,430

Is the bigger picture for property interest rates inflation, or is this, the

459

00:28:17,760 --> 00:28:19,410

Mansion Tax, substantial?

460

00:28:19,830 --> 00:28:23,010

I think you said it well. It's interest rates and inflation, and it's a really

461

00:28:23,071 --> 00:28:26,970

interesting idea to view house prices not just in nominal terms, but in

462

00:28:27,000 --> 00:28:28,650

inflation-adjusted terms as well.

463

00:28:28,829 --> 00:28:28,950

Mm. Yep.

464

00:28:29,190 --> 00:28:32,880

As you mentioned, in nominal terms, house prices in some areas of London actually

465

00:28:32,970 --> 00:28:37,830

are down. They have fallen. But of course, if you put that inflation adjusted, it's

466

00:28:37,890 --> 00:28:40,920

a far bigger fall in certain areas over the last five years.

467

00:28:41,640 --> 00:28:47,400

And that is probably of a greater concern to people when they're considering their

468

00:28:47,491 --> 00:28:51,090

house as a financial asset, when they're not viewing it through a family home or

469

00:28:51,150 --> 00:28:51,870

emotional lens.

470

00:28:52,801 --> 00:28:58,380

Right. So let's finally look at pensions, obviously very important, retirement,

471

00:28:58,590 --> 00:29:04,260

and wealth transfers. So unlike previous budgets, this budget didn't

472

00:29:04,351 --> 00:29:07,620

actually have huge changes to the pension system.

473

00:29:07,920 --> 00:29:10,380

So I guess all three of you are quite relaxed about that.

474

00:29:11,760 --> 00:29:13,770

Right. So we did have a little change, though.

475

00:29:13,801 --> 00:29:16,770

It's a little bit of an admin change. It's something called the two-year rule.

476

00:29:16,799 --> 00:29:17,280

Sure.

477

00:29:17,340 --> 00:29:20,460

What is the two-year rule? What does it mean?

478

00:29:21,030 --> 00:29:26,250

So what happens at the moment is that if somebody dies before the age of 75,

479

00:29:26,700 --> 00:29:31,801

the recipients of that pension fund can receive that fund income tax-free.

480

00:29:31,861 --> 00:29:33,330

Yes, I've already mentioned this to my husband.

481

00:29:34,020 --> 00:29:37,980

And I feel quite concerned that there might be

482

00:29:38,039 --> 00:29:38,640

a- Some people.

483

00:29:38,729 --> 00:29:41,189

Yeah. Yeah. There's exactly. Yes. So I did know this. Yes.

484

00:29:41,760 --> 00:29:43,830

So when you are in that position-

485

00:29:43,950 --> 00:29:44,250

Right

486

00:29:44,969 --> 00:29:46,620

... there is this, the two-year rule.

487

00:29:46,770 --> 00:29:46,830

Yeah.

488

00:29:46,830 --> 00:29:51,330

Basically says that once the pension scheme administrator is informed or should

489

00:29:51,390 --> 00:29:54,150

have known that the individual member has died-

490

00:29:54,270 --> 00:29:54,390

Yeah

491

00:29:54,449 --> 00:30:00,180

... they have two years in which to pay out that fund or

492

00:30:00,270 --> 00:30:02,580

start to pay out that fund if it's going to come as a

493

00:30:03,930 --> 00:30:09,540

pension type exit, and if you do not start to pay out within two years,

494

00:30:09,810 --> 00:30:14,491

you lose that income tax free exit.

495

00:30:14,491 --> 00:30:17,250

Even though the reason why they might not be paying it out because it takes forever

496

00:30:17,340 --> 00:30:18,690

to have a, you know, the whole-

497

00:30:18,840 --> 00:30:18,930

Sure

498

00:30:18,990 --> 00:30:22,470

... the whole process of a will and all that seems to be taking years and years and

499

00:30:22,530 --> 00:30:23,101

years.

500

00:30:23,100 --> 00:30:28,200

Well, remember. Yeah. But remember, a pension is outside the remit of the will.

501

00:30:28,230 --> 00:30:28,829

At the moment, yeah.

502

00:30:28,920 --> 00:30:31,680

So that's why. Well, I say that's why.

503

00:30:31,741 --> 00:30:36,720

That might be one of the reasons why they brought in this two-year limit.

504

00:30:37,051 --> 00:30:41,611

Now, very good that we see in the budget with, effectively, with immediate effect,

505

00:30:41,880 --> 00:30:43,950

that two-year rule has gone.

506

00:30:44,160 --> 00:30:44,430

Okay.

507

00:30:44,760 --> 00:30:50,611

So that means, you know, it doesn't matter if it takes you, the family, the

508

00:30:50,640 --> 00:30:56,611

pension administrator, a bit longer to decide how to use those pension funds.

509

00:30:57,000 --> 00:31:01,950

You're not going to be penalized from an income tax perspective if you go beyond

510

00:31:02,010 --> 00:31:05,940

that two-year limit as it was, well, from yesterday.

511

00:31:06,361 --> 00:31:10,020

So that is a really good measure, and it's going to...

512

00:31:10,051 --> 00:31:12,900

You know, nobody's going to be disagreeing with that measure at all.

513

00:31:14,101 --> 00:31:19,200

That's one part of it. Of course, the other part are the pension and IHT

514

00:31:19,290 --> 00:31:22,560

changes which do come in from April next year.

515

00:31:23,130 --> 00:31:24,601

So that's the fun bit. Just-

516

00:31:24,840 --> 00:31:24,900

Yeah

517

00:31:24,929 --> 00:31:26,341

... before we move on to those changes- Yeah

518

00:31:26,399 --> 00:31:30,480

... that we pre-announced, is there anything else that was announced yesterday?

519

00:31:30,690 --> 00:31:32,551

Really, on inheritance tax, we have-

520

00:31:32,880 --> 00:31:33,150

Nothing

521

00:31:33,240 --> 00:31:33,750

... nothing.

522

00:31:33,810 --> 00:31:34,260

Okay. Fine.

523

00:31:34,290 --> 00:31:39,210

Which is fantastic news in terms of planning because it just means that we sort of

524

00:31:39,270 --> 00:31:40,111

know where we are.

525

00:31:40,351 --> 00:31:40,410

Yes.

526

00:31:40,409 --> 00:31:43,710

We've got a little bit of stability, which means we can actually get on with doing

527

00:31:43,770 --> 00:31:46,230

some planning rather than having to wonder what's happening next.

528

00:31:46,321 --> 00:31:49,770

And again, it's worth saying the seven-year rule remains.

529

00:31:49,861 --> 00:31:50,130

Yes.

530

00:31:50,160 --> 00:31:50,400

Mm-hmm.

531

00:31:50,399 --> 00:31:54,571

You can give your assets away, and as long as you survive for seven years, they

532

00:31:54,630 --> 00:31:56,520

fall outside of inheritance tax.

533

00:31:56,611 --> 00:31:58,861

No limits have come in on what you can give.

534

00:31:58,979 --> 00:32:03,030

No limit, no limits have come in. The threshold, of course, has remained the same.

535

00:32:03,060 --> 00:32:05,491

It's been the same now for 10 years.

536

00:32:06,029 --> 00:32:07,890

Oh, yes. About 18 years, something like that.

537

00:32:07,920 --> 00:32:11,071

Whatever. It's 320. Nothing has changed there.

538

00:32:11,310 --> 00:32:12,420

It's not surprising.

539

00:32:12,720 --> 00:32:17,341

But yes, there is a period of stability this year- Mm

540

00:32:17,939 --> 00:32:19,500

... as regards inheritance tax.

541

00:32:20,551 --> 00:32:22,680

So let's go to what was announced, was it last year?

542

00:32:23,010 --> 00:32:23,430

Last year.

543

00:32:23,491 --> 00:32:24,090

Last year. Right.

544

00:32:24,179 --> 00:32:25,890

Yes. So let's say, because this comes in and-

545

00:32:25,920 --> 00:32:26,191

This is a big one

546

00:32:26,219 --> 00:32:28,380

... and it's the big one, and everyone needs to be aware of it.

547

00:32:28,440 --> 00:32:28,950

Absolutely.

548

00:32:28,980 --> 00:32:29,520

So explain.

549

00:32:30,120 --> 00:32:36,060

So it was announced last year that your unused pension, the value in your

550

00:32:36,120 --> 00:32:41,460

pension when you die, will now be brought into your inheritance tax estate.

551

00:32:42,030 --> 00:32:47,071

So this was a massive change because up till, well, up till April next year, if you

552

00:32:47,160 --> 00:32:52,351

die with pension assets, those assets just not taken into account for your

553

00:32:52,440 --> 00:32:56,460

inheritance tax. From April next year, they will be.

554

00:32:57,000 --> 00:33:02,220

Now, if you're in a marriage or a civil partnership and you're the first to die and

555

00:33:02,250 --> 00:33:06,510

you're passing your pension to your spouse or your civil partner, there is no

556

00:33:06,571 --> 00:33:09,840

change because we've still got the marriage exemption.

557

00:33:10,950 --> 00:33:16,020

But for anybody else, so the pension is effectively going down to whether it's the

558

00:33:16,080 --> 00:33:19,500

siblings or whether it's the children or grandchildren, doesn't matter, whomever,

559

00:33:20,310 --> 00:33:24,690

then that value gets put into your inheritance tax estate.

560

00:33:25,020 --> 00:33:30,270

So if you have a £1,000 of value, it's going to be charged to inheritance tax at

561

00:33:30,510 --> 00:33:35,190

40%. Let's assume you've used your nil rate band elsewhere.

562

00:33:36,361 --> 00:33:39,810

So you have now £600 left in your pension.

563

00:33:40,710 --> 00:33:45,690

And now I want to take that money out, and assume we've died after the age of 75.

564

00:33:45,750 --> 00:33:50,340

We're not in the- ... the income tax worrying situation you may find yourself in.

565

00:33:50,790 --> 00:33:50,940

Yeah.

566

00:33:52,290 --> 00:33:56,670

Then, so I've only got now £600 left in that pension, but when I take that money

567

00:33:56,730 --> 00:34:01,741

out, that comes to the recipient. Those recipients will pay income tax.

568

00:34:01,770 --> 00:34:02,250

Income tax.

569

00:34:02,370 --> 00:34:07,440

So the figures work out that if you are a 45% taxpayer, so an additional rate

570

00:34:07,500 --> 00:34:12,000

taxpayer, of that £600, you'll pay £270.

571

00:34:12,450 --> 00:34:18,301

So of that £1,000 that we started with, 67%

572

00:34:18,721 --> 00:34:19,741

goes in tax.

573

00:34:21,241 --> 00:34:22,290

So this is a biggie.

574

00:34:22,321 --> 00:34:22,801

Mm-hmm.

575

00:34:22,830 --> 00:34:24,210

And this is a biggie for you, too.

576

00:34:24,361 --> 00:34:24,630

Mm-hmm.

577

00:34:25,530 --> 00:34:26,160

So, Irene-

578

00:34:26,221 --> 00:34:26,640

Yes. So-

579

00:34:26,699 --> 00:34:29,310

... what conversations... Because it's coming in, right?

580

00:34:29,341 --> 00:34:29,520

It-

581

00:34:29,640 --> 00:34:30,841

April 2027. Yeah, yeah

582

00:34:30,840 --> 00:34:33,930

... it's coming in April 2027. And, and I think the very first thing to say is that

583

00:34:33,991 --> 00:34:35,250

pensions are still worth-

584

00:34:35,520 --> 00:34:35,880

Mm-hmm

585

00:34:36,149 --> 00:34:38,280

... worth it. And, and sometimes people think, "Oh, dear.

586

00:34:38,341 --> 00:34:39,870

All this pension stuff's changing.

587

00:34:39,991 --> 00:34:43,801

Should I even bother to have a pension?" And, and there is still a lot to be said

588

00:34:43,830 --> 00:34:45,991

from a tax point of view about having a pension about that.

589

00:34:46,051 --> 00:34:47,580

Both within the pension scheme-

590

00:34:47,640 --> 00:34:47,880

That's right

591

00:34:47,879 --> 00:34:51,660

... being tax-free, and with having put something aside for later in life.

592

00:34:51,721 --> 00:34:56,101

So, so that, that's not the issue. The issue then is what happens when you get as

593

00:34:56,160 --> 00:34:56,580

far as,

594

00:34:58,080 --> 00:35:03,360

as, as death, when, when you don't actually necessarily need all of that pension

595

00:35:03,420 --> 00:35:04,380

pot to, to pay-

596

00:35:04,440 --> 00:35:05,400

But it's difficult because, like-

597

00:35:05,460 --> 00:35:05,700

Yeah

598

00:35:05,759 --> 00:35:07,050

... we can't predict your death.

599

00:35:07,140 --> 00:35:07,560

No, and that-

600

00:35:07,590 --> 00:35:09,000

Well, how can you predict your... Well, I mean.

601

00:35:10,110 --> 00:35:10,530

It is mean.

602

00:35:10,560 --> 00:35:13,860

You can't, you can't predict your death. So, so, so, so what do you do?

603

00:35:14,160 --> 00:35:17,249

How can you plan for something that's inherently unplannable?

604

00:35:17,940 --> 00:35:20,491

Indeed, yes. So that's where we spend a lot of time and with-

605

00:35:20,550 --> 00:35:23,159

Yeah. I, I think that's a really good point.

606

00:35:23,221 --> 00:35:27,540

And because of those nuances and tho- around not just whether you've got an

607

00:35:27,601 --> 00:35:30,960

inheritance taxable estate, some people ring up, and because of the shape of their

608

00:35:31,050 --> 00:35:34,020

assets and their beneficiaries, actually they don't have a problem, and they're

609

00:35:34,050 --> 00:35:35,491

thinking of raiding their pensions.

610

00:35:35,520 --> 00:35:37,770

So it's really important you understand if it applies to you.

611

00:35:38,221 --> 00:35:42,721

But also, the, the first and foremost most important thing is, and you touched on

612

00:35:42,750 --> 00:35:45,780

it there, Irene, what do I need for my retirement?

613

00:35:45,870 --> 00:35:50,160

It is, it is, it is a retirement planning vehicle initially, or it was until it

614

00:35:50,190 --> 00:35:53,491

became an estate planning one. So I think understanding that first is really

615

00:35:53,520 --> 00:35:58,500

important. But then you've got the interaction between inheritance tax and income

616

00:35:58,560 --> 00:36:01,650

tax, so your age and tax status is relevant.

617

00:36:01,980 --> 00:36:06,630

Your beneficiaries' ages and tax statuses, stati, I'm not sure which it is-

618

00:36:07,559 --> 00:36:11,070

... are relevant. And it's a really bespoke area as a result, isn't it?

619

00:36:11,101 --> 00:36:11,580

Yeah. Absolutely. Yes. Yeah.

620

00:36:11,609 --> 00:36:15,270

So it's imperative perhaps more than some of the other areas that you take

621

00:36:15,360 --> 00:36:19,230

specialized advice about how it affects you personally and your family-

622

00:36:19,320 --> 00:36:19,441

Mm-hmm ...

623

00:36:20,100 --> 00:36:22,020

um, before you decide to, to take action.

624

00:36:22,320 --> 00:36:25,530

The other thing as well, so we, we touched on the fact that there weren't changes,

625

00:36:25,590 --> 00:36:27,810

for example, around contributing to pensions.

626

00:36:27,840 --> 00:36:28,020

Yep.

627

00:36:28,530 --> 00:36:30,870

Which I'm absolutely delighted about. I love a pension.

628

00:36:31,290 --> 00:36:34,500

I spoke about this last year. And you're quite right, they're still exceptionally

629

00:36:34,560 --> 00:36:38,040

tax-efficient vehicles even though we have these rules coming in, aren't there?

630

00:36:38,550 --> 00:36:42,030

Um, so for some people, contributing is still gonna be a no-brainer.

631

00:36:42,060 --> 00:36:44,640

It can, it can fix some of those cliff edges.

632

00:36:44,670 --> 00:36:46,471

It can bring you back your personal allowance.

633

00:36:46,500 --> 00:36:49,140

It can get you tax-free childcare, all sorts of things.

634

00:36:49,710 --> 00:36:53,070

But if you start to take a lot of money out of your pension, depending on how you

635

00:36:53,130 --> 00:36:56,700

do it, you might trigger something called the Money Purchase Annual Allowance.

636

00:36:56,730 --> 00:36:57,150

Mm-hmm. Yes.

637

00:36:57,210 --> 00:37:01,200

Which then makes it difficult to reseed your pension if that's the right thing

638

00:37:01,620 --> 00:37:03,840

moving forward. So yeah, really important.

639

00:37:03,899 --> 00:37:05,971

So just explain that. What do you mean reseed?

640

00:37:06,000 --> 00:37:10,050

Yeah. So s- what we find sometimes, we find people that might have retired or taken

641

00:37:10,110 --> 00:37:12,750

partial retirement, but then they go back to work.

642

00:37:12,780 --> 00:37:13,620

They get a bit bored.

643

00:37:13,650 --> 00:37:14,940

They get bored, yeah.

644

00:37:14,971 --> 00:37:15,480

They go back to work.

645

00:37:15,510 --> 00:37:17,610

Golfing no longer cuts the mustard anymore.

646

00:37:17,940 --> 00:37:21,840

So they go back to work, and then it, it makes sense for tax reasons to contribute

647

00:37:21,900 --> 00:37:25,440

to a pension. And if you've triggered the Money Purchase Annual Allowance, you've

648

00:37:25,500 --> 00:37:27,930

massively limited what you can pay back into your pension.

649

00:37:28,110 --> 00:37:28,800

Only 10 grand a

650

00:37:28,829 --> 00:37:29,520

year. That's right.

651

00:37:29,580 --> 00:37:30,060

Yeah.

652

00:37:30,090 --> 00:37:33,060

You've, you've triggered that, and, and it limits how you can get money in.

653

00:37:33,120 --> 00:37:37,890

So you might be doing one thing that's good over here for your family but actually

654

00:37:37,920 --> 00:37:40,830

shooting yourself in the foot. So it's, it's that balancing act, isn't it?

655

00:37:40,860 --> 00:37:45,000

And I think it's important to remind people, of course, with auto-enrolment-

656

00:37:45,000 --> 00:37:45,030

Mm-hmm

657

00:37:45,119 --> 00:37:46,710

... if they've gone back into employment-

658

00:37:46,830 --> 00:37:46,890

Mm-hmm

659

00:37:47,039 --> 00:37:49,590

... often they'll be auto-enrolled into a corporate scheme.

660

00:37:49,649 --> 00:37:50,221

Yep. Very good point.

661

00:37:50,280 --> 00:37:54,300

So they need to take care that, that, I mean, as I say, it's £10,000, so it's quite

662

00:37:54,360 --> 00:37:55,710

a lot to put through a corporate scheme.

663

00:37:56,040 --> 00:37:58,080

But if you are of that, that level-

664

00:37:58,200 --> 00:37:58,320

Mm-hmm

665

00:37:58,439 --> 00:38:00,781

... that you're not over-contributing- Mm

666

00:38:00,839 --> 00:38:04,560

... 'cause then you get a, a tax clawback, and then you're getting into a whole

667

00:38:04,650 --> 00:38:06,300

world of pain you don't want to be into.

668

00:38:07,050 --> 00:38:11,190

But that interaction between, between pension and estate planning, for things like

669

00:38:11,250 --> 00:38:12,571

gifting in the future as well- Yeah

670

00:38:12,629 --> 00:38:17,101

... there's gonna be some great conversations to be had with clients around how you

671

00:38:17,130 --> 00:38:20,580

can make it work for both yourself and your heirs and doing.

672

00:38:20,640 --> 00:38:24,360

I mean, yes, it's very much the sort of thing where, where i- in the past, people

673

00:38:24,390 --> 00:38:28,710

have been able to just say, "Not, not taxable," stick head in, in sand, go and do

674

00:38:28,741 --> 00:38:29,670

something more interesting.

675

00:38:29,760 --> 00:38:29,880

Mm.

676

00:38:30,120 --> 00:38:30,960

Now, the, the-

677

00:38:31,050 --> 00:38:34,320

There's nothing more interesting than tax. It's the best bit.

678

00:38:36,072 --> 00:38:37,332

Nothing more interesting than tax, really.

679

00:38:40,452 --> 00:38:45,792

But having said that, if you can actually bear it, and if you go and find your tax

680

00:38:45,852 --> 00:38:49,332

accountant or a financial advisor and sit down with them and say, "Right, what is

681

00:38:49,362 --> 00:38:53,292

best in my situation?" You will probably find that actually you've got a lot more

682

00:38:53,322 --> 00:38:57,282

clarity, and actually it can work very well.

683

00:38:57,373 --> 00:39:00,222

So, I'm sorry about having to extract head from sands, but-

684

00:39:02,471 --> 00:39:04,933

... it is actually a good thing- Yeah

685

00:39:05,021 --> 00:39:10,212

... to get on and do, because you may well find them actually comes up with quite

686

00:39:10,242 --> 00:39:11,052

decent solutions.

687

00:39:11,201 --> 00:39:15,432

I was about to say, there are some surprisingly nice options-

688

00:39:15,522 --> 00:39:15,942

Okay.

689

00:39:15,972 --> 00:39:16,062

Yeah

690

00:39:16,122 --> 00:39:17,982

... that people can start to think about.

691

00:39:18,042 --> 00:39:18,312

Okay.

692

00:39:18,702 --> 00:39:22,873

And the only way that they will understand what these options are is to come and

693

00:39:22,932 --> 00:39:23,742

talk to an advisor.

694

00:39:23,772 --> 00:39:25,001

So they're quite bespoke.

695

00:39:25,061 --> 00:39:25,482

Mm.

696

00:39:25,542 --> 00:39:25,902

Absolutely.

697

00:39:25,992 --> 00:39:27,402

So you need to come and speak to me, guys.

698

00:39:27,792 --> 00:39:30,252

Yeah. It is. But it's well worth doing.

699

00:39:30,732 --> 00:39:33,432

Do you have any strong feelings about tax and inheritance-

700

00:39:33,461 --> 00:39:33,583

Oh, that's a-

701

00:39:33,881 --> 00:39:35,232

... planning or pensions, James?

702

00:39:35,352 --> 00:39:37,542

I think it highlights the importance of advice, doesn't it?

703

00:39:38,862 --> 00:39:42,972

Yeah. Investments are very much driven, as I said, by macroeconomics when we're

704

00:39:42,972 --> 00:39:46,632

thinking about what is inflation, what is growth, what's the policy environment?

705

00:39:46,932 --> 00:39:51,132

These are relatively big buckets that translate well across countries and are

706

00:39:51,252 --> 00:39:53,772

generally quite similar for different clients.

707

00:39:54,072 --> 00:39:58,242

But then when it comes to your personal financial affairs, your personal tax

708

00:39:58,272 --> 00:40:00,282

circumstances, it's quite bespoke-

709

00:40:00,522 --> 00:40:00,552

Mm

710

00:40:00,642 --> 00:40:03,792

... and you need a wonderful... To have advice and you need to have planning for

711

00:40:03,852 --> 00:40:08,262

it. And as we know, in the UK in general, that is an area that is under-penetrated,

712

00:40:08,712 --> 00:40:14,351

that the UK population doesn't take, on average, the advice and the support that

713

00:40:14,682 --> 00:40:15,342

perhaps it needs.

714

00:40:15,643 --> 00:40:19,302

Okay. Right, so let's move on now to audience questions.

715

00:40:19,393 --> 00:40:24,612

Right, so the top one is: Should I reconsider how much I'm holding in cash?

716

00:40:25,992 --> 00:40:27,582

I'm looking at you, James, by the way.

717

00:40:28,782 --> 00:40:33,643

So, I think that is a question that has to again be individual, which is one needs

718

00:40:33,702 --> 00:40:39,252

to have enough cash to cover emergencies, to cover changes in lifestyle,

719

00:40:39,942 --> 00:40:44,832

potentially, and to accommodate all those unexpected events that can happen.

720

00:40:45,462 --> 00:40:50,052

Once that's determined, one can then decide how much of the additional money can be

721

00:40:50,112 --> 00:40:54,342

put to work in what I would describe as perhaps longevity, i.e., assets that will

722

00:40:54,402 --> 00:40:58,542

grow over the medium to long term. And of course, even legacy, if people want to

723

00:40:58,572 --> 00:41:01,362

think about charitable donations and other topics as well.

724

00:41:01,782 --> 00:41:06,132

So, putting it through a liquidity lens, a longevity lens, and perhaps a legacy

725

00:41:06,162 --> 00:41:08,652

lens as well, is how I would personally go about thinking.

726

00:41:08,682 --> 00:41:10,362

Because cash enables you to take risk.

727

00:41:10,452 --> 00:41:10,782

Yeah.

728

00:41:10,873 --> 00:41:11,442

It does.

729

00:41:11,682 --> 00:41:12,252

Basically.

730

00:41:12,311 --> 00:41:14,982

But I think that's an important point, and I'll add another lens there-

731

00:41:14,982 --> 00:41:15,612

Oh, go on, go for it

732

00:41:15,761 --> 00:41:21,432

... around risk. So, if you're really risk averse, cash might be the ideal home for

733

00:41:21,492 --> 00:41:24,912

you, and it may be that your plans have shown that you don't need to take risks.

734

00:41:25,002 --> 00:41:25,332

Okay.

735

00:41:25,393 --> 00:41:28,932

In order... If inflation is eating into your assets, so be it, and you're still

736

00:41:29,022 --> 00:41:32,052

fine. And that might be the lesser of two evils for some people.

737

00:41:32,112 --> 00:41:36,552

But certainly over the longer term, understanding the impact of that on your wealth

738

00:41:36,612 --> 00:41:37,932

is really, really important.

739

00:41:37,962 --> 00:41:41,172

But if we are entering a... Sorry. If we are entering a higher inflation

740

00:41:41,232 --> 00:41:44,772

environment, people do need to understand that cash is not risk-free.

741

00:41:45,192 --> 00:41:45,252

Mm.

742

00:41:45,552 --> 00:41:46,062

Because-

743

00:41:46,632 --> 00:41:47,712

It's a different type of risk

744

00:41:48,521 --> 00:41:50,562

... it's a risk, and it's a risk that most people don't even see.

745

00:41:50,922 --> 00:41:53,082

And what we sometimes say is, if you had £1 million

746

00:41:54,312 --> 00:41:58,152

20 years ago, and you walked into a shop with that today, you'd be able to buy

747

00:41:58,272 --> 00:42:03,972

about 58, no, 580. Crikey, that would be 580,000 pounds worth of

748

00:42:04,092 --> 00:42:04,482

stuff.

749

00:42:04,661 --> 00:42:09,342

Yeah. So, it is a massive impact. But so is coming out of the market at the wrong time.

750

00:42:09,552 --> 00:42:13,752

So having those discussions around risk, around what it means for you, around your

751

00:42:13,812 --> 00:42:15,102

financial plan, are really important.

752

00:42:15,312 --> 00:42:20,442

Yes, that was actually going to be entirely my point, is inflation eating away at

753

00:42:20,712 --> 00:42:23,502

cash is something that is underestimated.

754

00:42:23,562 --> 00:42:23,952

Yes.

755

00:42:24,012 --> 00:42:28,873

It is so easy, again, to put one's head in the sand, say, "We've got this money on

756

00:42:28,932 --> 00:42:30,373

deposit and I'm not going to do anything with it.

757

00:42:30,972 --> 00:42:33,492

Investments are actually a bit complicated." But actually,

758

00:42:35,262 --> 00:42:35,862

you will find that-

759

00:42:35,952 --> 00:42:36,644

You can lose a lot of money

760

00:42:36,731 --> 00:42:37,662

... you can lose a lot of money.

761

00:42:37,842 --> 00:42:40,692

You can. And sometimes people think it's cash or-

762

00:42:41,172 --> 00:42:41,232

Yeah

763

00:42:41,861 --> 00:42:47,082

... down the casino. There's a whole spectrum in between, and the experts

764

00:42:47,143 --> 00:42:51,342

put together those solutions that mitigate that risk along that spectrum.

765

00:42:51,852 --> 00:42:53,893

Right. What have we got?

766

00:42:58,932 --> 00:43:02,742

A bit of a political question. I don't know if you want to do this one.

767

00:43:04,332 --> 00:43:07,002

Why is the tax on savings increasing?

768

00:43:07,512 --> 00:43:07,542

Okay.

769

00:43:07,572 --> 00:43:10,123

Shouldn't savers be encouraged instead?

770

00:43:10,452 --> 00:43:10,572

So-

771

00:43:11,082 --> 00:43:11,502

Yeah

772

00:43:11,561 --> 00:43:13,182

... your world of tax, right? So-

773

00:43:13,873 --> 00:43:13,902

Yeah

774

00:43:14,021 --> 00:43:16,873

... tax raises money for the government to spend.

775

00:43:16,902 --> 00:43:17,682

Yep. Absolutely.

776

00:43:17,682 --> 00:43:19,932

But tax also changes, as we talked about earlier-

777

00:43:19,962 --> 00:43:20,322

Behavior

778

00:43:20,441 --> 00:43:21,162

... behavior.

779

00:43:21,222 --> 00:43:21,312

Mm.

780

00:43:21,762 --> 00:43:23,772

So you're like a little psy-

781

00:43:24,102 --> 00:43:24,552

Absolutely.

782

00:43:24,582 --> 00:43:25,272

You're a-

783

00:43:25,932 --> 00:43:27,342

You're not really just a tax person.

784

00:43:27,402 --> 00:43:30,042

No, you're not. You're to do with how people behave.

785

00:43:30,132 --> 00:43:30,432

Yes.

786

00:43:30,522 --> 00:43:32,532

Absolutely. Absolutely. Now, it's

787

00:43:33,373 --> 00:43:35,232

Psychologist, that's the word I was thinking of.

788

00:43:35,292 --> 00:43:40,482

So, I think the answer to this question is you've got to look at it in the whole

789

00:43:40,572 --> 00:43:43,123

context of what's going on in the political world.

790

00:43:43,422 --> 00:43:45,552

Now, of course, I am not a political commentator.

791

00:43:45,672 --> 00:43:45,792

Nope.

792

00:43:46,332 --> 00:43:51,162

But from what I read, from what I understand, and so on, we know that the

793

00:43:51,222 --> 00:43:56,172

government was limited in what it could do because of the manifesto pledges.

794

00:43:56,442 --> 00:43:56,532

It was.

795

00:43:56,562 --> 00:44:00,822

So it cannot raise income tax, or cannot, it will not raise income tax, corporation

796

00:44:00,882 --> 00:44:02,172

tax, or VAT.

797

00:44:02,292 --> 00:44:02,382

Mm-hmm.

798

00:44:03,132 --> 00:44:06,192

We've raised about £5 to 6 billion in this budget.

799

00:44:06,252 --> 00:44:06,373

Mm-hmm.

800

00:44:06,402 --> 00:44:11,022

Put that in context. A penny on income tax, which is then across the board,

801

00:44:11,532 --> 00:44:15,582

everybody sort of suffers equally, if you like, raises about £8 billion.

802

00:44:15,972 --> 00:44:19,842

So we could've made one measure and we wouldn't have had-

803

00:44:19,992 --> 00:44:20,953

And this, we want to understand- ...

804

00:44:21,161 --> 00:44:21,312

all that

805

00:44:21,401 --> 00:44:21,732

... that the,

806

00:44:22,992 --> 00:44:25,062

if you're going to do heavy lifting when it comes to tax-

807

00:44:25,152 --> 00:44:26,172

Yeah, you need the big levers

808

00:44:26,471 --> 00:44:29,773

... it's the big levers. And they've specifically said we're not touching

809

00:44:29,801 --> 00:44:30,552

that. We're not touching them.

810

00:44:31,182 --> 00:44:36,882

So what was left? Of course, we've had two very, very high tax-raising

811

00:44:37,002 --> 00:44:40,452

budgets of this government already, '24 and '25.

812

00:44:40,873 --> 00:44:45,132

They've already been down that sofa. They have delved, and delved, and delved.

813

00:44:45,432 --> 00:44:46,453

Now there's not much left. There's

814

00:44:46,631 --> 00:44:51,252

not a lot left. So what was there left for them to do, and who was going to

815

00:44:51,432 --> 00:44:52,602

squeal the least?

816

00:44:52,692 --> 00:44:52,932

Mm-hmm.

817

00:44:53,472 --> 00:44:54,042

Savers.

818

00:44:55,032 --> 00:44:59,292

This is quite a good one. Someone drawing down annually on a pension fund rather

819

00:44:59,322 --> 00:45:05,022

than an investment ISA, do these tax changes draw people back towards draw

820

00:45:05,112 --> 00:45:06,671

down from an ISA?

821

00:45:08,472 --> 00:45:10,962

So again, I think that's very bespoke.

822

00:45:10,992 --> 00:45:15,192

It depends on your circumstances and what other income sources you've got coming

823

00:45:15,282 --> 00:45:19,752

in. So where people aren't using the personal allowance for whatever reason,

824

00:45:19,873 --> 00:45:22,632

sometimes it can make sense to draw money from a pension.

825

00:45:23,532 --> 00:45:27,042

If you're under the age, if you're quite significantly under the age of 75 and

826

00:45:27,072 --> 00:45:31,032

you're still in that world where income tax doesn't apply if you pass your fund on,

827

00:45:31,123 --> 00:45:33,432

then that could mean you want to preserve your pension.

828

00:45:33,912 --> 00:45:34,512

So I think

829

00:45:36,192 --> 00:45:40,452

what we tend to look at with clients on a year by year basis, taking into account

830

00:45:40,512 --> 00:45:44,412

the fact that budgets come in every year and things might change, is where's the

831

00:45:44,442 --> 00:45:49,062

best place to fund your income from in this year and plan accordingly.

832

00:45:49,692 --> 00:45:51,252

Things will continue to move around.

833

00:45:51,702 --> 00:45:56,802

I'm also often wary of going too far down one lane with people as well.

834

00:45:57,102 --> 00:45:57,972

So that's what I was going to mention.

835

00:45:58,152 --> 00:45:58,182

Yeah.

836

00:45:58,241 --> 00:46:01,722

So I'm sure James will talk about the importance of diversification in assets.

837

00:46:01,812 --> 00:46:02,953

It's the same thing really. But

838

00:46:02,951 --> 00:46:05,173

actually we need to talk about diversification in tax wrap as

839

00:46:05,201 --> 00:46:06,672

well. You need flexibility.

840

00:46:06,732 --> 00:46:07,032

Yes.

841

00:46:07,092 --> 00:46:07,272

Yeah.

842

00:46:07,332 --> 00:46:11,592

And one thing that people often forget is that having something in an ISA does not

843

00:46:11,652 --> 00:46:12,972

protect you against inheritance

844

00:46:13,001 --> 00:46:13,182

tax. Mm.

845

00:46:13,393 --> 00:46:13,512

Mm-hmm.

846

00:46:13,782 --> 00:46:19,752

Never has. It only protects you against income tax and capital gains tax for

847

00:46:19,782 --> 00:46:20,922

things within that ISA.

848

00:46:21,822 --> 00:46:21,912

Mm.

849

00:46:21,972 --> 00:46:22,632

So actually,

850

00:46:24,942 --> 00:46:26,412

we still have anything that is

851

00:46:27,643 --> 00:46:31,842

in an ISA, if it was going to be subject to inheritance tax anyway, which is almost

852

00:46:31,902 --> 00:46:35,502

always going to be the case, then it would still be subject to inheritance tax.

853

00:46:35,532 --> 00:46:38,412

And that is something that sometimes people do forget.

854

00:46:38,592 --> 00:46:42,582

I agree. James, too many chancellors, too many prime ministers.

855

00:46:42,882 --> 00:46:45,822

Does this budget give us greater stability?

856

00:46:47,022 --> 00:46:47,082

Uh.

857

00:46:47,172 --> 00:46:49,302

And he called it a breathing space, didn't he?

858

00:46:49,361 --> 00:46:50,232

Mm. That's what he called it.

859

00:46:50,592 --> 00:46:50,682

Mm.

860

00:46:50,772 --> 00:46:55,632

But actually, some commentators today are saying, "Great, we're not changing

861

00:46:55,692 --> 00:46:58,452

everything. But where's the growth?"

862

00:46:59,172 --> 00:47:03,102

Yes, so if you think about most businesses, the time horizon that they need to plan

863

00:47:03,162 --> 00:47:05,502

on, we're talking five years, 10 years plus.

864

00:47:05,742 --> 00:47:05,922

Okay.

865

00:47:06,373 --> 00:47:11,082

The greater stability that you can have in your economic regime, whether that is

866

00:47:11,143 --> 00:47:17,082

corporation tax or of course personal taxation as well, the more likely you are to

867

00:47:17,143 --> 00:47:21,732

see people confident to invest in new businesses, new services, et cetera.

868

00:47:22,602 --> 00:47:26,322

So we don't need to change for change sake, as it were.

869

00:47:26,652 --> 00:47:30,402

Having a year when you have a relatively benign budget is probably quite a good

870

00:47:30,462 --> 00:47:35,232

thing when people want to have stability of regulatory regime and stability on a

871

00:47:35,292 --> 00:47:38,352

forward-looking basis of what matters to them when they invest.

872

00:47:39,384 --> 00:47:43,344

Another question for you, James. How do you think the budget will affect inflation,

873

00:47:43,404 --> 00:47:45,084

and what could it mean for interest rates?

874

00:47:46,194 --> 00:47:49,584

So if we look ahead to next week, as I said, the market consensus is that interest

875

00:47:49,614 --> 00:47:52,224

rates are going up. We are adding another 25 basis points.

876

00:47:52,344 --> 00:47:53,484

3.75 to 4?

877

00:47:53,694 --> 00:47:58,674

Absolutely. But I think what's interesting there is if we talk about real yields,

878

00:47:58,884 --> 00:48:02,844

so this is the yield that you get on a UK government bond, a gilt.

879

00:48:03,174 --> 00:48:07,584

You take away the inflation, we actually now have a positive real yield, quite

880

00:48:07,614 --> 00:48:11,814

substantial as well, which is not something we've necessarily enjoyed over the last

881

00:48:11,874 --> 00:48:16,194

five to seven years. So what this is telling us is that the market is somewhat more

882

00:48:16,254 --> 00:48:20,154

optimistic actually about the growth outlook for the UK economy.

883

00:48:20,394 --> 00:48:26,004

They're now pricing in, as I said, a potential for economic expansion in a manner

884

00:48:26,034 --> 00:48:28,434

that wasn't the case a few years previous.

885

00:48:28,855 --> 00:48:32,544

And that, I think, probably talks less to inflation and more to some of the

886

00:48:32,574 --> 00:48:36,264

productivity stories that we touched on at the beginning of the webinar, and that

887

00:48:36,294 --> 00:48:42,204

there is this kind of a shard of hope, if you will, around what the UK economy

888

00:48:42,264 --> 00:48:44,424

could become over the next three to five years.

889

00:48:46,254 --> 00:48:51,684

Do we have any details of the new ISA for first-time investors?

890

00:48:53,574 --> 00:48:55,134

Not as far as I can see in any of the-

891

00:48:56,605 --> 00:48:59,844

I think there was something, and I'm trying to struggle to remember it now.

892

00:49:00,204 --> 00:49:01,224

There's going to be

893

00:49:02,605 --> 00:49:05,634

a government bonus on maximum £20,000.

894

00:49:06,984 --> 00:49:08,155

Kind of a bonus. I think

895

00:49:08,303 --> 00:49:10,045

that's the LISA alternative. Oh, that's

896

00:49:10,343 --> 00:49:10,374

a different one.

897

00:49:10,404 --> 00:49:11,844

So there's two or three different-

898

00:49:11,934 --> 00:49:12,145

Yeah ...

899

00:49:13,193 --> 00:49:13,794

ISA suggestions.

900

00:49:13,824 --> 00:49:15,355

We've had a few announcements. Yeah.

901

00:49:15,414 --> 00:49:21,264

Yes. So as far as ISA's are concerned, first of all, there's this

902

00:49:21,294 --> 00:49:26,814

thing where they're not going to restrict you to only 12,000.

903

00:49:26,874 --> 00:49:27,504

The cash ISA.

904

00:49:27,564 --> 00:49:32,874

Cash ISA. A second one is that they're changing the LISA, that's a lifetime ISA,

905

00:49:33,324 --> 00:49:37,404

rules on withdrawals where you withdraw to buy something that costs more than

906

00:49:37,824 --> 00:49:41,454

450,000 of property. Where in the past they have

907

00:49:43,044 --> 00:49:46,134

been written so that you actually got out less than you put in.

908

00:49:46,494 --> 00:49:49,674

So they're changing those penalty rules to say that basically you get out what you

909

00:49:49,704 --> 00:49:51,714

put in, and you won't have an extra penalty.

910

00:49:52,254 --> 00:49:58,194

They're going to change that LISA in the way you were saying, I think it

911

00:49:58,224 --> 00:50:01,404

was from 2029, but you may want to check that one,

912

00:50:02,544 --> 00:50:05,244

to update this

913

00:50:07,194 --> 00:50:10,464

lifetime ISA, this sort of help to buy for people who are buying their first

914

00:50:10,525 --> 00:50:16,134

property. There was also a suggestion of a new ISA for people who have never

915

00:50:16,194 --> 00:50:17,364

invested before.

916

00:50:17,394 --> 00:50:17,605

Mm.

917

00:50:17,993 --> 00:50:23,124

Mm. And as far as I can see so far, there is absolutely no further detail on that, and

918

00:50:23,184 --> 00:50:25,314

that we would expect some sort of consultation.

919

00:50:25,344 --> 00:50:27,864

That I was about to ask you. There's normally a consultation period.

920

00:50:28,074 --> 00:50:28,224

Yeah.

921

00:50:28,254 --> 00:50:28,704

Yes. Okay.

922

00:50:30,234 --> 00:50:36,084

Another question on ISAs. Has the proposed tax on cash held within a stocks and

923

00:50:36,174 --> 00:50:38,184

shares ISA been scrapped?

924

00:50:38,664 --> 00:50:40,074

Yes. That's all gone, isn't it?

925

00:50:40,434 --> 00:50:44,064

Thank goodness, because that would've been extremely complicated to administer.

926

00:50:44,334 --> 00:50:45,474

So you're delighted about that.

927

00:50:45,564 --> 00:50:46,314

I'm over the moon.

928

00:50:46,974 --> 00:50:50,275

Just makes it simpler. I think you need the ISA simplicity.

929

00:50:51,264 --> 00:50:56,424

Now, a few people want this. What are your short-term savings suggestions?

930

00:50:57,355 --> 00:51:00,984

I know if that's budgetary savings in the house and canceling your Spotify-

931

00:51:01,463 --> 00:51:05,154

... or whether that actually means where do you park your cash.

932

00:51:05,275 --> 00:51:06,564

Anybody want to ask that?

933

00:51:06,804 --> 00:51:09,174

It probably comes back to what's the cash for.

934

00:51:09,504 --> 00:51:14,184

So echoing what James said, if your cash is very much for your emergency fund and

935

00:51:14,214 --> 00:51:17,964

your short-term needs, it needs to be cash, and you need to recognize that that

936

00:51:18,025 --> 00:51:21,084

part of your money is not going to keep pace with inflation.

937

00:51:21,775 --> 00:51:25,644

There are other low-risk ways of holding funds that are quite tax efficient.

938

00:51:25,704 --> 00:51:25,884

Mm-hmm.

939

00:51:26,304 --> 00:51:29,724

So that might be something, depending on your personal circumstances, that you

940

00:51:29,754 --> 00:51:34,734

would want to explore with your advisor as well, sort of a stepping stone from in

941

00:51:34,794 --> 00:51:40,285

the bank to investments. And then again, it comes back to the risk conversation and

942

00:51:40,315 --> 00:51:44,454

the idea that the tax tail shouldn't wag the investment dog.

943

00:51:46,764 --> 00:51:49,884

So an oldie but a goodie.

944

00:51:49,974 --> 00:51:51,324

I've been hearing that for decades.

945

00:51:51,354 --> 00:51:51,775

Yeah, that's right.

946

00:51:51,775 --> 00:51:53,454

But that's because it's so true.

947

00:51:53,484 --> 00:51:53,844

It's true, yeah.

948

00:51:53,875 --> 00:51:57,594

So we do have to make sure that you've got your cash where it needs to be, and then

949

00:51:57,655 --> 00:52:02,035

consider perhaps with that next bit before you're looking at your longer-term fund,

950

00:52:02,424 --> 00:52:05,184

is there a little bit of a more tax-efficient way of holding it?

951

00:52:05,244 --> 00:52:07,704

Quite a few questions on the mansion tax. What's it called again?

952

00:52:07,734 --> 00:52:09,084

What's the official treasury term?

953

00:52:10,194 --> 00:52:12,684

It's a high-value council tax surcharge.

954

00:52:12,714 --> 00:52:18,594

Yeah, whatever. Right. Now, so who's going to do it, how, and over what

955

00:52:18,684 --> 00:52:19,074

period?

956

00:52:19,525 --> 00:52:21,504

This is the door-knocking question, isn't it?

957

00:52:21,984 --> 00:52:26,785

So at the moment, we have these valuations, and they are doing their best to value

958

00:52:26,844 --> 00:52:30,414

any property that looks as if it might be £2 million or more.

959

00:52:31,014 --> 00:52:31,434

In theory-

960

00:52:31,494 --> 00:52:33,594

Do you know how they're targeting those?

961

00:52:35,035 --> 00:52:36,204

I mean, to a large extent, they'll-

962

00:52:36,984 --> 00:52:38,424

Based on 1992 values.

963

00:52:38,574 --> 00:52:39,504

That's what I'm saying.

964

00:52:39,565 --> 00:52:42,174

No, it's valued on this year's values.

965

00:52:42,264 --> 00:52:46,014

2026 values, but how are they... They're going into Zoopla?

966

00:52:46,104 --> 00:52:49,704

Well, they've got, of course, all of the records from the

967

00:52:51,444 --> 00:52:52,254

Land Registry.

968

00:52:52,434 --> 00:52:55,405

Good luck on that, because one house in a row can be worth very different to

969

00:52:55,464 --> 00:52:56,484

another house in a row.

970

00:52:56,514 --> 00:52:59,244

That's the particular issue with the higher value houses.

971

00:52:59,304 --> 00:53:01,134

So if you've got a whole load of terraces,

972

00:53:02,394 --> 00:53:06,294

they're probably all much of a muchness, but when you've got an individual house,

973

00:53:07,944 --> 00:53:08,304

it may well

974

00:53:08,363 --> 00:53:10,344

be- Oh, I can see the rows already.

975

00:53:10,494 --> 00:53:16,224

So there's going to be... They've employed quite a number of new employees to

976

00:53:16,794 --> 00:53:19,794

look at these valuations. They'll use

977

00:53:21,684 --> 00:53:25,224

all the data that is available from things like the Land Registry, from, I suppose,

978

00:53:25,254 --> 00:53:26,514

things like Zoopla and what have you.

979

00:53:27,655 --> 00:53:32,604

And in theory, there is an idea that they may actually be able to go and have a

980

00:53:32,634 --> 00:53:35,665

look at houses in certain circumstances. Of

981

00:53:36,473 --> 00:53:40,974

course. The idea is that the value will be the 2026 value, and then it'll be revalued every

982

00:53:41,394 --> 00:53:42,234

five years, I believe.

983

00:53:43,674 --> 00:53:47,275

There is going to be some sort of appeals process.

984

00:53:48,203 --> 00:53:49,944

I have no idea quite how that's going to work.

985

00:53:50,304 --> 00:53:51,234

Obviously, if you've got a

986

00:53:52,764 --> 00:53:53,785

property that was last

987

00:53:55,014 --> 00:53:59,364

sold for £10 million, and given that the highest threshold is only five million,

988

00:53:59,724 --> 00:54:01,554

there won't be much argument about it.

989

00:54:01,974 --> 00:54:05,483

But there's a threshold at two million and a threshold at two and a half.

990

00:54:06,504 --> 00:54:12,143

So if your house was valued at 2.6, you might be sort of thinking, "Is this

991

00:54:12,174 --> 00:54:15,264

really quite the case?" So there will be a lot of discussion about that.

992

00:54:17,214 --> 00:54:19,734

As a tax expert, is this implementable?

993

00:54:20,544 --> 00:54:24,864

Well, to be fair, this is not sort of the taxes that I get involved with.

994

00:54:24,864 --> 00:54:24,894

Okay.

995

00:54:24,984 --> 00:54:26,875

This is council taxes really.

996

00:54:26,934 --> 00:54:27,174

Okay.

997

00:54:28,044 --> 00:54:32,214

I wonder as well, so if you're in the just over two million bracket, you've been

998

00:54:32,304 --> 00:54:35,934

paying this surcharge, and then you move and your house sells for 1.9, you'll be

999

00:54:35,964 --> 00:54:37,434

rather miffed, wouldn't you, that you were-

1000

00:54:37,434 --> 00:54:37,974

You certainly would.

1001

00:54:38,004 --> 00:54:39,324

There's a refund.

1002

00:54:39,414 --> 00:54:40,734

I haven't seen anything like that.

1003

00:54:40,824 --> 00:54:41,454

Probably not.

1004

00:54:41,754 --> 00:54:46,315

But it's being done at the council tax level, so it's councils that will be

1005

00:54:47,304 --> 00:54:51,354

actually sending the bill. Mostly it will be with your council tax bill, although

1006

00:54:51,414 --> 00:54:53,815

it's for the owner rather than the occupier.

1007

00:54:53,905 --> 00:54:56,004

So in some cases, that would be different.

1008

00:54:56,785 --> 00:54:59,815

You might have more than one bill if you have a lot of properties worth more than

1009

00:54:59,844 --> 00:55:00,324

£2 million.

1010

00:55:00,684 --> 00:55:01,194

It would be quite...

1011

00:55:02,754 --> 00:55:04,315

And then finally, a question for you, James.

1012

00:55:04,525 --> 00:55:08,275

Should we aim for 3% of global allocation into UK shares?

1013

00:55:08,484 --> 00:55:09,625

Very specific, that question.

1014

00:55:11,334 --> 00:55:15,114

I think I know the source of the question, which is these days when we do look at

1015

00:55:15,174 --> 00:55:20,905

global financial markets, the UK as a stock market is approximately 3% of-

1016

00:55:21,054 --> 00:55:21,115

Oh, wow

1017

00:55:21,173 --> 00:55:22,405

... the global stock market. Indeed.

1018

00:55:22,464 --> 00:55:27,234

The US is roughly 50, bit more than 50% these days, and the US is just a few

1019

00:55:27,264 --> 00:55:32,364

percentage points. So I think again, it comes down to an individual having

1020

00:55:32,424 --> 00:55:37,344

familiarity with your local market, investing in names that you know.

1021

00:55:37,614 --> 00:55:40,044

Increasingly, of course, these aren't names that are on the high street.

1022

00:55:40,464 --> 00:55:41,844

They are international companies.

1023

00:55:42,264 --> 00:55:45,924

There is some merit in that, again, from an emotional point of view.

1024

00:55:46,914 --> 00:55:50,604

So there is definitely an argument to have for certain people, for their

1025

00:55:50,664 --> 00:55:56,514

preferences, more than that 3% would suggest in terms of what we would call a UK

1026

00:55:56,574 --> 00:56:01,194

home bias. But on a completely agnostic basis, generally speaking, if you're

1027

00:56:01,224 --> 00:56:05,155

completely agnostic to that kind of emotional and personal basis, and yes, you

1028

00:56:05,184 --> 00:56:10,494

would have about 3% of your investment capital in the UK, and the rest in other

1029

00:56:10,554 --> 00:56:13,734

countries such as the US and emerging markets and so forth.

1030

00:56:14,125 --> 00:56:17,125

James, thank you very much. Well, thank you for the panel.

1031

00:56:17,155 --> 00:56:23,004

That was absolutely fantastic. So Jenna, Irene, James, and Rachel, your

1032

00:56:23,035 --> 00:56:26,424

perspectives, very insightful. I imagine you're going to be busy over the next few

1033

00:56:26,484 --> 00:56:29,875

days going through the Red Book in great detail and all

1034

00:56:31,914 --> 00:56:34,074

the detail and consultations to come.

1035

00:56:34,584 --> 00:56:39,565

Thank you to you, of course, for joining us, and for those, of course, who sent in

1036

00:56:39,804 --> 00:56:44,184

a question. We appreciate there is a lot to absorb after a budget.

1037

00:56:44,815 --> 00:56:48,894

The announcements may affect people and families in different ways, and over the

1038

00:56:48,984 --> 00:56:53,125

coming days, we'll be sharing more information on the key announcements and how

1039

00:56:53,184 --> 00:56:56,934

they could impact you. So watch out for your inbox.

1040

00:56:56,994 --> 00:57:02,065

You will be getting an email from us soon, which will explain where you can go to

1041

00:57:02,125 --> 00:57:07,224

find out more information as we get more detail and as it is analyzed.

1042

00:57:07,644 --> 00:57:10,854

If you're an existing client and would like to discuss how the changes relate to

1043

00:57:10,944 --> 00:57:14,994

your circumstances, then just contact your usual advisor.

1044

00:57:15,414 --> 00:57:21,114

If you are not yet a client, though, you can scan the QR code on the screen, I

1045

00:57:21,174 --> 00:57:26,304

think it's there, to arrange a conversation with one of our experts.

1046

00:57:26,364 --> 00:57:28,764

I hope you enjoyed it and found this useful.

1047

00:57:29,094 --> 00:57:31,344

So thank you for joining us, and goodbye.