With a new labour government, there could be significant changes to taxes, capital gains, and pensions based on their historical positions and recent policy proposals.

It’s important to keep an eye on specific manifesto commitments and policy announcements for detailed plans. Consulting with Robinsons to understand and plan for any potential changes.

Here’s a detailed look at what might be expected:

Taxes

1. Income Tax:

• Higher Rates for Top Earners: Labour has proposed increasing income tax rates for higher earners. The top rate of income tax could rise, potentially impacting those earning over £80,000 or £100,000.
• Lower Thresholds for Higher Rates: The thresholds at which higher rates apply might be lowered, bringing more individuals into higher tax brackets.

1. Corporation Tax:

• Increase in Rates: Labour has historically favoured raising corporation tax. This could mean an increase from the current rate, reversing recent cuts.

1. Wealth Taxes:

• Introduction of a Wealth Tax: Labour has considered introducing a wealth tax on individuals with significant assets. This could include properties, investments, and other forms of wealth.
• Inheritance Tax: Changes to inheritance tax to ensure wealthier estates pay more could be on the agenda.

Capital Gains

1. Alignment with Income Tax:

• Higher Rates: Labour has proposed aligning capital gains tax rates more- closely with income tax rates. This could result in higher rates of tax on capital gains, especially for higher earners.
• Reduction in Allowances: The annual tax-free allowance for capital gains could be reduced, meaning more gains would be subject to tax.

1. Broader Application:

• Inclusion of More Assets: The range of assets subject to capital gains tax could be broadened, potentially impacting a wider variety of investments.

Pensions

1. State Pension:

• Triple Lock: Labour has historically supported the triple lock on state pensions, which ensures the state pension increases by the highest of inflation, average earnings growth, or 2.5%.
• Increased Funding: There might be increased funding for the state pension system to ensure its sustainability and adequacy.

1. Private Pensions:

• Tax Relief Reform: Labour could reform pension tax relief, potentially making it less generous for higher earners. This might involve capping the relief or providing a flat rate of relief for all taxpayers.
• Auto-Enrolment Expansion: Labour may expand auto-enrolment to include more workers and potentially increase the minimum contribution rates to boost retirement savings.

1. Public Sector Pensions:

• Protections and Enhancements: Labour is likely to protect and potentially enhance public sector pensions, ensuring they remain attractive and fair for public sector workers.

Summary

A Labour government is likely to introduce measures aimed at increasing tax revenues from higher earners and wealthier individuals, as well as enhancing public services and social security, including pensions. Changes to capital gains tax and pension tax relief could particularly affect higher earners and those with significant investments or pension savings. However, it’s important to keep an eye on specific manifesto commitments and policy announcements for detailed plans. Consult with Robinsons to understand and plan for any potential changes.

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