ISA season is truly upon us now, but our users are thinking about much more than just how to make the most of their allowances. Tax-efficient investments, wills and how to pass pensions on optimally are also top of the agenda.
Rather like Christmas or Easter, for private client fund managers the end of the tax year is a major landmark in the calendar and one that creeps up but does need careful planning for. It was much harder to get the relevant client account data in times past and this required endless printouts that often needed updating. That part at least is much easier and it’s a case of clicking a button.
In the current environment of KYC (Know Your Customer), the start of a new tax year is a great opportunity to look at every portfolio and – whilst checking the capital gains position – making sure that ISAs have been subscribed for. George Osborne helpfully increased the annual ISA limit in July, and wealth managers should be engaging with clients – as if one is taking profits or establishing a loss, and then if clients need cash as a result, it is a good moment to have the conversation.
Every Budget gets more complicated and this one was no exception. The changes in ISAs mean reading the fine print very carefully; the whitepapers are not yet enshrined in law.
However an ISA allowance of £30,000 for couples is definitely beneficial and both wealth managers and clients see this as a great opportunity to build up tax-free pots.
In this new tax year the world of pensions enters a new era and, although we cannot give pension advice, it’s a time to review client requirements and start them thinking if they haven’t already as to what they might do with the pensions they have (or what they ought be saving for what is likely to be a long retirement). The downside of the working age getting ever further out is that people fondly imagine that pensions can go on the back-burner. It is surprising how quickly the time comes round and whatever government emerges in May it is clear that having people save for their own pension is a priority for all the political parties.
This end of tax year sees an election in another month and that again is cause for deliberation. Although we have just had the Budget, a different band of politicians will probably see it is an irresistible task to make some further changes, so tax planning now becomes more pressing. There is no shortage of things to do and much to think about on as we begin a new tax year.