Practice group articles

In sickness and in health
3 March 2010

B P Collins Trust Corporation | Professional Trusteeship
22 February 2010

Will your inheritance be safe? | Contested Wills
23 January 2010

Providing the right building blocks for your family's finances | Property investment
22 January 2010

The Legal Services Act: Lamb, lemons and legal services?
15 December 2009

Chancellor's pre-Budget report (PBR) | Impact on Inheritance Tax and Trusts
14 December 2009

Quiet Budget a 'welcome change' for solicitors and clients

01 May 2009



Despite being one of the most historic Budgets the UK has ever seen, this year's financial plan laid out by Chancellor Alistair Darling was relatively quiet from a legal perspective.

While Budgets in recent years have introduced radical changes to legislation that have had far-reaching effects across various sectors, this year Mr Darling was more focused on financial stimuli aimed at helping the economy recover from recession.

Jane Northway, senior associate in B P Collins private client practice group, says the plans outlined by the Chancellor marked a refreshing change.

"From our point of view, the Budget was relatively free of issues and that is quite a welcome situation," she asserts.

The last few years have seen the introduction of major changes which have had a significant affect on B P Collins' clients, according to Ms Northway. As a result, solicitors have spent months updating its clientele about regulatory alterations which have implications on their personal affairs . "We are now getting to the point where we have managed to communicate all the previous legislative changes to our clients."

"The Budget in 2006 and 2007's pre-budget report we had a range of very significant changes that have had a massive effect, so now every time there is a Budget we approach it with a degree of caution," says Ms Northway.

While this year's financial plans will not have the same kind of far-reaching consequences in terms of legislation, there are still elements that will impact upon the individuals that seek the advice of B P Collins' private client practice.

"The big changes that are likely to affect our clients are income tax rates and changes in tax relief for pensions for very high earners," Ms Northway explains.

From April 2010, a rate of income tax of 50 per cent will apply to people earning over £150,000.

"In terms of income tax allowances, as soon as those rates go up, our wealthier clients will be paying more tax and will be asking, 'should I be in the UK or should I be living out of the UK?' There is frustration at the very high end, with people thinking, 'why should I pay?' For very wealthy clients, the increase is significant."

While Ms Northway asserts that it is impossible to tell at the moment whether there will be a trend towards emigration to avoid the high rate of income tax, she suggests that it will be moved up the agenda for some of the higher earners in the UK.

Furthermore, from April 2011, the 40 per cent tax relief on pensions and contributions will be abolished for people earning £150,000 and over, who will enjoy tax relief at the standard rate of 20 per cent. This is likely to affect many higher earners who had carefully planned their futures around the current pension system so that they could afford to retire early, for example.

Ms Northway reveals that B P Collins has been working with clients looking at family estate planning as a way of redistributing assets in order to save for the future without being hit by the Budget proposals.

If you would like to speak to one of B P Collins' private client experts, please call 01753 279045 or email privateclient@bpcollins.co.uk.