The UK Chancellor of the Exchequer, George Osbourne, released details of the 2015 Budget 18 March, amid the run up to this year’s UK general election.
The significance of the announcements for private banking mainly clients centres around the pension reforms, implementation of the much talked about mansion tax, implications for the UK property market and LDF closure.
Industry experts have given their reactions to the 2015 Budget announcements and identified what they think will affect the wealthy.
Will Fraser-Allen, deputy managing partner at Albion Ventures, commented on the reduction in the lifetime pension allowance from £1.25m to £1.m:
"There is little doubt that this will increase demand, among a significant larger number of people planning for retirement, to invest in a broader range of tax-efficient pension supplements, including Venture Capital Trusts. "
"We’ve already seen a substantial increase in investor interest in VCTs following earlier reductions in the pension lifetime allowance and expect this additional reduction to further boost demand."
Brett Williams, managing director at SEI Wealth Platform, UK Private Banking added:
"The reduction on the pensions cap is disappointing, but leaving alone tax relief makes pensions saving even more attractive following the relaxation on annuities and the tax changes."
Dean Turner, Director Investment Office UK at UBS Wealth Management, further said:
"The changes to the personal tax allowance and the higher rate band should be supportive for the consumer, as should the freeze on duty for petrol. Abolishing tax on the first £1,000 of savings will also support household incomes".
"The Help to Buy ISA was a surprise move which could support the housing market and the home building sector".
Rachel de Souza, tax director, RBC Wealth Management, commented in the Spears blog on stamp duty land tax and ATED:
"The Annual Tax on Enveloped Dwellings (ATED) has been extended to apply to residential properties owned by a company and worth more than £1m from April 2015. Just as importantly, the annual tax charges involved are about to increase by more than 50%.
"For the ultra-wealthy, this increase is unlikely to be more than a minor irritant, but for many in the South East who have benefited from strong growth in property prices, it represents a real dilemma."
John Cassidy, tax investigation partner national audit, tax and advisory firm at Crowe Clark Whitehill, commented on the early closure of the Liechtenstein Disclosure Facility:
"This really does emphasise that anyone with something to declare needs to do so quickly.
"The new disclosure facility is to be based on penalties of at least 30% of the tax due, with no immunity from prosecution, whereas the current Liechtenstein Disclosure Facility provides for penalties as low as 10% and a guarantee of no prosecution. Those wishing to come forward now have less time to avail themselves of these more beneficial terms"