Cautious optimism, but frozen allowances!13 January 2022
The new year, 2022, has started and most of us hold out more hope of a better year ahead. The Chapters Financial team has settled into our new offices in Tunsgate, Guildford, with the move having run very smoothly.
Christmas was busy for many, perhaps as a compensation for the year before, which some would prefer to forget, and an air of cautious optimism seems to prevail as we look forward. Sure, there are the remaining winter months to endure; however, hope is ahead for normality to return.
Easter falls in mid-April, and as a financial planner, this always focuses the mind on the end of the tax year (05 April each year), and of course the start of the new tax year 2022/2023.
The annual tax allowances that clients and individuals can use are usually on a 'use it or lose it' basis, with most allowances being renewed each tax year. You may remember that the Chancellor froze any increases in personal allowances for five years hence, therefore, most will stay static for a good time ahead. Notably, one change at this time will be the anticipated increase in national insurance contributions for most in work.
Some allowances, such as the ISA allowance (to a maximum of £20,000) are reasonably obvious to most; however, other allowances, such as the dividend tax allowance (£2,000 pa gross) or the capital gains tax allowance (£12,300 pa) may be less so, but both can be very effective for planning purposes.
Let's not forget other allowances as well, such as the standard personal income tax allowance of £12,570 gross and the annual gift allowance (£3,000 per donor) for inheritance tax purposes.
Each client is different, and so are the assets they own, their attitude to investment risk, and the individual tax allowances that may benefit their overall wealth management. Individual views may change over time as tolerances to investment risk change, or ethical, social environmental and governance (ESG) views evolve, as investment houses become more conscious of how they invest for growth, income and returns.
Whatever your plans are for 2022, we hope that you have positive outcomes, both for your own wellbeing, but also for your financial planning.
No individual advice is provided during the course of this blog.
Keith Churchouse FPFS
CFP Chartered FCSI
Chartered Financial Planner
Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899