With Prime Minister Keir Starmer warning of a “painful” Autumn Budget, families with assets are being urged to explore ways to mitigate potential tax hikes on capital gains, inheritance, and pensions.
The stark warning from Nigel Green, the CEO and Founder of deVere Group, follows Chancellor Rachel Reeves refusing to rule out tax rises.
Mr Green said: “With the Chancellor and Prime Minister refusing to rule out these increases, and the Government appearing to be in full briefing mode, deVere Group is calling on its clients and the public to act now to safeguard their wealth.
“The warning signs are unmistakable: a painful adjustment is on the way, and families across Britain, and those overseas with assets in the UK, are facing tax hikes which could significantly hit their wealth.”
Mr Green noted that Capital Gains Tax (CGT), inheritance tax (IHT), and pension taxes are being seen by the Government “as low-hanging fruit” —quick and effective means to generate revenue.
For Capital Gains, analysts speculate that tax rates will be increased. People only have to pay Capital Gains Tax on the overall gains above their tax-free allowance, which is called the Annual Exempt Amount. Currently, the Capital Gains tax-free allowance is £3,000, down from £6,000 in 2023/24.
Any gains made above the £3,000 allowance will currently be taxed between 10 percent and 28 percent, depending on a person’s income tax band and the asset being sold.
For inheritance tax, experts predict the Residential Nil-Rate Band, which applies a £175,000 tax-free allowance to properties handed down to direct descendants, could be slashed or removed.
Meanwhile, the Telegraph reported that Ms Reeves could have considered a proposal for a flat 30 percent rate of pension tax relief. This means that higher-rate payers would pay an effective 10 percent tax charge on their retirement contributions.
Mr Green warned: “This focus puts significant pressure on many middle-class families, as well as investors, and high-net-worth individuals, who will suddenly find themselves shouldering a heavier tax burden. The impact, we believe, will prompt a scramble to review financial portfolios and implement strategies to protect assets before the new measures take effect.”
He added: “Safeguarding your investments against potential tax hikes is essential. Don’t wait until the Budget is announced—proactive planning is key.”
Sharing three ways people can work to protect their money, Mr Green said: “Consider tax-efficient investment vehicles, rebalancing portfolios, and potentially realising gains under the current CGT rates before any changes are implemented, for example.”
Additionally, Mr Green warned that high-net-worth individuals might find themselves contemplating more drastic measures, such as relocating overseas to avoid the anticipated tax burden.
He said: “Faced with the prospect of increased tax burdens, many wealthy individuals are actively exploring relocation to countries with more favourable tax regimes.
“Popular destinations such as Spain, Italy, Switzerland, Malta, Dubai, and Singapore are seeing increased interest, thanks to their lower tax rates and sophisticated financial planning strategies tailored to affluent individuals. Many of these individuals already own properties abroad, highlighting their international mobility and readiness to move their tax domiciles.”
However, Mr Green warned that the potential exodus of HNWIs poses significant implications for the UK economy.
He said the contributions of these individuals, through both direct taxes and indirect investments, have historically played a crucial role in the country’s prosperity.
He warned their departure could reduce tax revenues, affecting public services and infrastructure development. The UK’s reputation as a global hub for wealth and business might also suffer.
Mr Green said: “There is, we believe, a significant tax raid coming. By reviewing portfolios now and making the necessary adjustments, we can help investors protect their wealth. But the key is early action—waiting until the budget is announced could mean missing out on crucial opportunities to mitigate the impact.”