Category: Political

Posted on

Slack News Fortnight

Obviously It’s been anything but a slack fortnight at the office. With 5 major events occurring, which have repercussions for investors, I thought it would be best to wait until all 5 unknowns were in before I commented. Individually, each of these domestic and international geo-political events will shape how we manage our investment portfolios and how we help clients plan their finances, both now and into the future.

Plan | Save | Grow | Spend | Gift | Pass

But firstly I would like to extend our condolences to the families of the two clients we suddenly lost this week. After almost 38 years building long-term client relationships it’s inevitable that some must come to an end. Currently we are helping the families of 8 of our clients who have passed away in recent months.

Hopefully our previous financial planning and long-term client relationships will help at this difficult time.

The 5 known unknowns

“There are known knowns, things we know that we know; and there are known unknowns, things that we know we don’t know. But there are also unknown unknowns, things we do not know we don’t know.”

Donald Rumsfeld – United States Secretary of Defense.

Two weeks ago we knew there was a UK budget to come, a new Conservative leader to be chosen, a new President of the US, a further interest rate decision to be made in the US and also an interest rate decision due from the Bank of England. All those changes would move both domestic and global shares in some way. Some outcomes were expected, some were binary decisions which were too close to call and some were just plain unexpected.

Continue reading “Slack News Fortnight”
Posted on

Investors in the Cross Hairs

We ended our previous blog with:

 If tax concessions are taken from one area they will seek others. Expect to see changes brought in concurrently to limit ISA contributions and increase the rates of Capital Gains Tax to investments outside of ISAs. The subject for next time.

So as promised here is my take on the increase in Capital Gains Tax and the decrease/capping of an individuals ISA allowance.

Currently there is no CGT on ISA or Pension investments, we expect that to remain the same. This blog is really only of interest if you hold excess investments in a General Account outside of your ISAs & Pensions. If you do not have a General Account there is no need to read on, unless you are interested. The rest of you can get back to what you were doing before this blog interrupted you.

Increase in Capital Gains Tax

We have left this blog quite late, with the Autumn Budget just 48 hours away now, but we have been waiting to see if any clearer information surrounding tax rates would be “leaked”.

Investment capital gains have always been taxed at a lower rate than earned and unearned income. That differential is about to become closer, or indeed fully closed, with maybe even a doubling of the rate of tax. Basic rate tax-payers currently are charged 10% on the gain achieved from holding investments (higher for property gains) Our worst expectations are that this could be increased to 20%. For higher rate tax-payers, their current 20% rate could be raised to 40%.

Continue reading “Investors in the Cross Hairs”
Posted on

Don’t mention it

If you wish to avoid embarrassing moments at dinner parties there are some rules you must follow.

  • Don’t talk about politics.
  • Don’t talk about religion.
  • Don’t talk about sex.
  • Don’t spill any red wine. (Sorry Stephen & Aileen)

Well because this isn’t a dinner party, I guess I’m free to talk about them all. In fact, although the first three rules should sound like 3 separate subjects, they are now all inextricably linked. What’s more, it’s becoming increasingly difficult to have a view on one without needing to have a corresponding tribal view on all three. What am I talking about? Thursday 4th July. Independence Day in the US, but a General Election here in the UK.

Expected effect on investment markets.

Yes the day has come where we will be asked to choose the party to form a government for the next 5 years. A time where the expectation is stock markets will be volatile. But wait a minute, it seems that the “Risk Index”, the VIX in the US and the Citi Macro Risk Index here in the UK is sitting at roundabout all time lows. Just look at the 20 year chart below. This suggests there are no nasty market surprises just around the corner.

Continue reading “Don’t mention it”