UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's
Politics / UK Tax & Budget Oct 27, 2024 - 09:26 PM GMTBy: Nadeem_Walayat
The Labour government budget is set to punish those who work hard and reward those on benefits by seeking to fill a £22bn hole in the finances though not by raising income, tax or VAT. So the plan is to hit those with assets which means the Labour government is coming after many folk who would not consider themselves as being rich. perhaps all it takes is living in a property worth £1 million will put folk in the cross hairs of the Liebour government.
Meanwhile the real rich are running away from the UK in their thousands and taking their wealth with them to places such as Dubai
WEALTH TAX
All that hard work over a lifetime of saving and investing whilst others have splurged or sat idle on benefits is now could get punished with a wealth tax which will probably be based on property values. Anyway it will send a message that HARD WORK, Savings and Investing for ones future does NOT PAY!
PENSIONS
Labour eyes hitting those who save for their retirement, the message being folk should save nothing for retirement and instead rely on state handouts. There is a high risk of employer contributions getting hit with a 13.8% NI TAX.
LANDLORDS
Prepare to DIE! Liebour is set to pile a whole pile of poop on your business models such as inability to get your property back from tenants without entering a lengthy legal battle which effectively cripples all those without a legal department to handle all of the paperwork involved.
CAPITAL GAINS TAX
The Tories had already crippled the allowance for Cap Gains now Labour seeks to finish the job by upping the starting tax rate to the base rate of 20%, up from 8.75% with the marginal rate rising from 20% to 39% which would make it the highest in Europe!
All that hard work to work towards building capital to invest which is TAKING A RISK! i.e. the risk of capital loss! And the thieving scum bag government taxes folk 20% on the gain BEFORE INFLATION STEALTH THEFT! Which means it would no longer be worth the effort of for instance investing in crypto or stocks outside of tax free wrappers! Thus the government can expect to yield LESS tax in future years as people become less likely to sell assets so fewer transactions. Whilst the rich will seek to offshore their assets so less capital gains tax and income tax.
In comparison to the US for most at them moment the cap tax rate is 15% on investments held for over 1 year. So Liebour hiking from 20% to 40% would no longer make investing in stuff such as crypto worth the effort and risk, given that +50% of the gain would be stolen by the government by means of tax and inflation.
What to do ?
Crystallise gains before the budget at the current cap gains tax rate which could result in a market panic in some assets as many rush to lock in a lower tax rate. What I will do is a lot fewer transactions outside a tax free wrapper so whilst initially there may be a tax hike in future years I will pay LESS tax.
ISA
The final nail in the coffin could come if Liebour cripples ISA's by putting a lifetime limit of say £100k on ISA's. This is probably not going to happen but if it does will hasten the flight of capital out of the UK. Under Liebour hard work and saving for ones future will no longer pay. Add this years allowance in case the ISA is capped at £100k or the annual allowance is CUT.
If you have yet to open an ISA for the current tax year then T212 is doing a promo where we both get a free share by following this link https://www.trading212.com/invite/16aA4Pdcoi but you are going to have to act fast to ensure its opened and funded BEFORE the Budget.
PENSIONS
Make an employer contribution due to a high risk of employer contributions getting hit with a 13.8% NI TAX.
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UK Budget 2024
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Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.
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