Scotsman Money Budget Round Table
Category
🗞
NewsTranscript
00:00Hello, I'm Rosemary Gallagher, Head of Commercial Content for The Scotsman.
00:03Today, for the UK Landmark Budget, we've brought together a range of experts
00:07to have a roundtable discussion with myself, Josh King, who's Head of Business for The Scotsman,
00:11Bruce Hendry from Carlton, Ewan Ferney from accountancy firm MHA,
00:15Tom Gillingham from Charlotte Street Partners, and Christy Newell from Burness Paul.
00:19We've now listened to the UK Budget, Rachel Reeves first.
00:23We'll sit down with a panel of experts to discuss what was announced from capital gains tax to inheritance tax,
00:28and find out how our experts think that will affect themselves and their clients.
00:32I think it could have been a lot worse. A lot of the news or speculation was it was going to be a lot worse.
00:40From a personal finance point of view, the change to inheritance tax for pension schemes
00:47will have a big impact on a lot of clients, and that's something I think a lot of people are going to have to
00:52revisit their plans and their strategy.
00:55I think the main questions will centre around capital gains tax and pension planning and inheritance tax
01:01and how that impacts on them. So they've obviously had strategies put in place,
01:06and with the changes to the rules, that may have an impact on them.
01:09So as ever, people are wondering how it's going to affect them, and to see if their plans need altered in any way.
01:15I think she was very, very relieved to finally be giving the budget, to be honest.
01:19I think it's been a long and difficult run-in to the statement itself.
01:23There was a lot to unpack in there, a lot of different moving parts,
01:27but really for her perspective, she'll be worried about the devil being in the detail.
01:31Often what comes out of the budget comes out when the fine tooth comb is applied,
01:35so we'll wait and see what happens when that occurs.
01:38There's a few tricky things in there for Scotland as a whole, actually.
01:42So you're looking at an increase in duty on whisky, rising in line with inflation.
01:47North Sea, the energy profits levy is being unpicked.
01:51There was a headline increase to 38%, which will be felt in the North East.
01:55And actually some of the changes to agricultural business relief, down to a million pounds,
02:02that will sort of suck in a lot of Scottish farms.
02:05So clients will be asking about those specifics, but actually the other part is,
02:09well, what does this mean politically?
02:11I believe she's set a few traps for the SNP.
02:14One, on income tax thresholds being frozen.
02:17I mean, it's not a huge change, but it kind of puts the pressure back on the SNP.
02:21But also how the Barnett consequentials flow through to services, how does that play out?
02:26So there's a few interesting bits in there.
02:28The final point actually is business rates.
02:30That's a devolved issue, but she's sort of looked at reforms,
02:34so people will be asking, what are you going to do in Scotland?
02:37Indeed, it was lengthy.
02:39I guess kind of key takeaways are probably it's not as bad from a tax perspective
02:43as it might have been for investors.
02:46Our clients, a lot of them are shareholders,
02:49and so the capital gains tax rises were not as bad as they might have otherwise been.
02:53We're straight after the budget, so we don't quite know yet
02:56when the increase to 24% and 18% takes effect.
03:00I'm not sure if it's immediately or at the start of the next tax year,
03:03so it'll be interesting to see.
03:05But I think overall, not as bad as it might have been,
03:08and most announcements were as expected.
03:11I think the main one will be the detail of when the capital gains tax rates take effect,
03:16because that will impact on transactions.
03:19If there is a lag until the start of the next tax year,
03:22that could be quite a lot of activity between now and then
03:25in terms of trying to get transactions done to benefit from the lower rates of 20% and 10%.
03:30I guess other questions might be,
03:32what can they do about employers' national insurance rises,
03:35and some things like salary sacrifice schemes and so on
03:39that might allow them to give the same overall package to employees
03:42without it affecting costs.
03:44I suspect questions will come on that.
03:46I think for my specific clients, there were three things that came out today.
03:50The first one, the inheritance tax relief coming down from 100% to 50%.
03:55Again, we need to see the detail behind that.
03:58Is that only on death?
04:00Does that allow lifetime transfer still to be made without an inheritance tax charge,
04:04so what's called a potentially exempt transfer?
04:07Again, the devil will be in the detail behind that.
04:10It might change the way that family businesses get passed on.
04:14It might change the timing of how that's going to happen.
04:18It also might change the way that families have to plan for that.
04:22They might need to insure against it for the future.
04:25Insuring over a long time means that there's a pot of money left,
04:28you don't have to sell the business.
04:30It might mean that some people take the view that they sell the businesses
04:33rather than pass them on, so that on death there is liquidity.
04:36There's actually cash available to pay the inheritance tax.
04:39I think there's two other main ones.
04:41The capital gains tax, the rates have increased.
04:43We all anticipated that, but I don't think they've necessarily increased
04:47as much as we thought they might have.
04:50It's a bad point, but it's a good point.
04:55I think the final one was the bit about maintaining thresholds.
05:00She made that a very positive argument when she was standing there.
05:03It's a very negative one, because for another three years,
05:06we've got fiscal drag.
05:08But the way she delivered it, it suggested that it was a huge advantage.
05:11It's not. It is an easy way of getting more tax.
05:14I think the initial thoughts are that it could have been worse.
05:19I think there are certain areas that haven't been mentioned
05:22in the speech today.
05:24That might come out in the paperwork afterwards.
05:26There might be other things, there will be other things
05:28that will need to be looked at.
05:31For me, I think all the speculation beforehand,
05:37a lot of it hasn't come to fruition.
05:39She's nailed various things very quickly,
05:42and all the speculation that's gone on around about
05:47what the disaster that it could have been as a budget
05:50isn't actually there in the detail.
05:54It sounded quite a balanced budget.
05:56It sounded as if it had been well put together, well thought through.
05:59They've had a bit of time to do that.
06:02I think all in all, it's not as bad as it could have been.