Now that the outcome of the UK general election is clear, what does the result mean purely from an economic perspective?
In financial planning terms, Inheritance Tax exemption for some properties may now be on the cards. The recent pensions reforms will remain but it is hard not to be disappointed over the loss of Steve Webb, a minister who arguably made pensions relevant again. It is unlikely there will be any changes over the recent proposals regarding the status of those who are non-domiciled in the UK.
Turning to economics it seems likely that the UK stock market will rise, sterling will hold a stronger position and the deficit reduction will continue. In the longer term, the possibility of an EU referendum before 2017 will cause uncertainty during the remainder of 2015 and into 2016.
When it comes to tax we expect to see more targeting of tax avoidance. Tax rates will remain fairly consistent and the bank levy may now come down. There will be some further ‘tax take’ around the edges but it is unlikely there will be changes to core taxes.
Succession planning is a common concern for many clients and Scottish devolution may increase complexity on estates in Scotland. If IHT exemption is introduced it could result in some people staying in houses they don’t really want to purely for tax reasons.
As the next days and weeks unfold, the shape of the next term will become clearer. Throughout a changing landscape, The Fry Group provides help and advice with all aspects of financial planning.