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Legal News | 20.06.24

Taxing ourselves with taxes

With the launches last week of the Conservative and Labour party manifestoes we take a brief look to compare the parties’ policies on taxes that could affect our clients in the months and years to come.

 

  • Inheritance Tax (IHT): The Conservatives have not included the previously talked of inheritance tax reform policy.  Labour is largely quiet on pledges relating to IHT.

 

  • National Insurance (NI) and Income Tax:  the Conservatives would aim to abolish NI for the self-employed, with a further 2p cut for employees.  Labour’s intention is not to increase the basic, higher or additional rates of income tax or NI.   Income Tax and NI thresholds are currently frozen until April 2028.

 

  • Capital Gains Tax (CGT): The Conservatives have committed to not raise CGT rates.  They will retain the Principal Private Residence Relief – meaning an individual’s main home is exempt from CGT.   Labour makes no specific CGT pledges but has not ruled out increasing CGT rates potentially bringing in line with income tax.

 

  • Pensions: The Conservatives have not announced new taxes on pensions but would introduce the ‘Triple Lock Plus’ pledge for pensions, an increase in line with average wages, inflation or 2.5%, whichever higher.  Labour promises a review of pensions to grow UK investment.

 

  • Independent Schools: Labour has included their much talked of pledge to end independent schools’ VAT exemption and business rate relief.  The Conservatives do not make a similar pledge.

 

Of course, it could be what the manifestoes do not address that comes into play after 4 July but at Wansbroughs we are here to guide you through organising your affairs in the best possible way whichever political party is in power.

 

Posted By Our Wills, Tax, Trusts & Probate Team