By Iain Lightfoot, Joint Managing Director, Armstrong Watson Financial Planning and Wealth Management

THE Office for Budget Responsibility (OBR) recently commented that with the significant Government support to help deal with the Covid-19 health crisis they are expecting a budget deficit of around £280 billion in the 2020/21 financial year.

The OBR also highlighted that approximately £174 Billion could be raised relatively easily through a series of “Wealth Taxes”.

Below are some current opportunities that could therefore come under the spotlight:

Pensions Tax Relief for Higher Earners

Abolishing higher-rate tax relief on pension contributions has long been discussed. Higher rate taxpayers currently receive tax relief at 40%. In the March Budget the rules were actually relaxed on how much higher earners can save into their pensions while receiving tax relief. This could well be reversed as quickly as it came.

Inheritance Tax

In the first 6 months of the last tax year, according to data from HMRC, IHT receipts reduced by £316 nillion to £2.4 billion compared to the same period the previous year. IHT reform has been on the agenda now for a number of years. Could we now see a further tightening up in this area?

Reducing Capital Gains Tax Allowances

The current allowance for each individual is £12,300. This means you can hold an investment (OEIC/Unit Trust/Investment Trust) or other investment assets and the profit will only be taxed after the allowance is taken off. Reducing this allowance would also raise additional tax revenue.

ISA allowances

ISAs were first introduced back in 1999. Each individual currently has a £20,000 overall ISA allowance. This might be another area for the Government to consider?

Whether these happen will clearly be up for debate and consideration when we get to the other side of Covid-19. However, for those people who are considering taking advice in any of the above areas we would suggest that now would be a good time to do so, whilst we definitely know the reliefs, allowances and opportunities remain fully available.

At Armstrong Watson we can provide a full review of your financial affairs with our compliments in the first instance. You can also now do this remotely by video, telephone as well as face to face. Please contact me on 0808 144 5575 or email