In addition to this, consider maximising your capital gains tax allowance of £3,000 by switching from one fund to another. If you fall under the higher or additional tax brackets, crystallising some gains now may help you avoid higher tax rates later. Taxpayers may also want to consider transfers early this year to maximise tax efficiency.
As well as capital gains tax, anticipate upcoming changes to inheritance tax by leveraging your annual gift allowances and consider potentially exempt transfers to soften future tax impacts. Taking a fresh look at your property and asset holdings can ensure that your wealth is better protected before any new regulations come into play.
Expect higher employer National Insurance contributions as a reality under the new Budget. Businesses, especially in labour intensive sectors like retail and services, should brace for tighter profit margins. Investors in these areas need to reassess their exposure and adapt accordingly.
Also, venture capital trusts allow investors to access tax relief and potentially attractive returns – but also help to boost enterprising British companies.
They have been instrumental in funding innovative start-ups and high-growth companies. Currently, we recommend Pembroke and British Smaller Companies – and are happy to say that we offer the biggest discounts in the market.
Finally, while markets may appear calm now, potential tax changes and borrowing adjustments could stir volatility, particularly in bond markets. Consider diversifying your portfolio with assets that can act as a buffer against turbulence, such as commodities, inflation-linked bonds, or defensive stocks.
Watch the horizon
The Budget is unlikely to disrupt the Bank of England’s current course, with anticipated rate cuts in November and December expected to settle the Bank Rate around 3.25pc by mid-2025.
A carefully balanced fiscal policy that emphasises infrastructure investment should support this outlook, keeping rates steady and market nerves calm.