Anna Sofat, adviser and associate director at Progeny, agrees and also suggests precautionary action in case CGT is targeted: “As there are rumours of changes to pension tax relief, we are advising clients to make any last-minute pension contributions before the Budget.
“Also, if clients are sitting on big gains in their portfolios, then we are talking about realising some of these to mitigate risk of legislation changes – CGT at 20 per cent is as good as it is likely to get.”
However, Mr Leckridge said inheritance tax may be higher up the agenda than pensions: “Rumours of abolition of marginal-rate tax relief on contributions and reduction of the 25 per cent tax-free lump sum on pension pots have been around for a few years, but nothing has come to pass as yet.
“IHT appears the most likely to be subject to change in the short term.
“The Office of Tax Simplification published a report in 2019 suggesting a wide-ranging overhaul of the IHT system, including abolishing taper relief on gifts reducing the value of the gift still deemed to be in the donor’s estate over time and zeroing capital gains on the death of the asset owner.
“We don’t yet know if the government will act on these recommendations, but rumours abound.”
Other advisers do not envisage any sweeping changes at all in the forthcoming Budget, as Keith Churchouse of Chapters Financial Planning states: “I’m not convinced there are going to be any changes in personal allowances.
“I’m also not expecting any sea change to occur, other than the possible flat rating on pensions.”
Fiona Nicolson is a freelance journalist
