The recent UK Autumn Budget delivered by Chancellor Rachel Reeves has introduced significant changes to tax and spending policies that will directly impact individuals managing General Investment Accounts (GIAs), Individual Savings Accounts (ISAs), and Self-Invested Personal Pensions (SIPPs).

1. Capital Gains Tax (CGT) Adjustments
   Capital Gains Tax rates have increased across the board, which will affect most investment portfolios that are outside an ISA or Pension wrapper. With the reduction in the CGT annual exemption in recent years, many high-value asset holders will now face higher tax liabilities on disposals. Those with large GIAs or high-value, long-term investments should consider revisiting asset allocation and sale timing to manage CGT exposure effectively.
   
2. Changes to Inheritance Tax (IHT)
   A major change is the inclusion of larger pension pots within the IHT bracket starting from 2027, meaning that pension wealth transferred upon death could become subject to IHT. Previously, pensions were a valuable tool in estate planning due to IHT exemptions. With this change, individuals should re-evaluate pension contributions and look at other tax-efficient options, including setting up trusts or rebalancing asset holdings within ISAs and SIPPs. It may also be worth considering increasing withdrawals if IHT is going to be paid anyway.
   
3. Increase in Employer National Insurance Contributions
   Business owners and those with significant investments in private companies may see the impact of increased Employer National Insurance Contributions (NICs). This shift will influence business profitability, impacting valuations and dividends within certain sectors.
   
4. Investment Opportunities in Government-Supported Sectors
   The budget outlines increased government spending on infrastructure, housing, and renewable energy. These sectors are likely to benefit from stable cash flows and government support, presenting opportunities for clients interested in diversifying their portfolios. The green and tech sectors, in particular, may offer high-growth opportunities as the government seeks to advance net-zero initiatives.
   
5. Inflation and Interest Rate Environment
   With inflationary pressures persisting, the Bank of England’s approach to interest rates will continue to affect both borrowing costs and asset valuations. Fixed-income investments within ISAs and SIPPs, as well as property investments, may see adjustments in value as interest rates remain high.

If you would like to discuss your investments in light of the Budget and/or to discuss setting up an account please contact support@capitalfinancialmarkets.co.uk.