Jayne McGlynn’s Post

Jeremy Hunt unveiled the 2024 Spring Budget, introducing policies to bolster the UK economy: 1. National Insurance Reductions: Employed National Insurance contributions drop from 10% to 8%, saving individuals up to £450 annually, combined with the Autumn Statement cut. Self-Employed National Insurance contributions also decrease by 2%, or 3% when combined with the Autumn Statement cut, benefiting around 27 million workers. 2. Capital Gains Tax Adjustment: Property Capital Gains Tax decreases from 28% to 24%, aiming to stimulate property listings and address housing supply-demand imbalances. 3. Introduction of the British ISA: A new British ISA provides an additional £5,000 allowance for investment in UK businesses, encouraging support for domestic enterprises. 4. Pension Investment Disclosure: Defined contribution pension schemes must disclose UK asset investments by 2027, with a target of 5% investment in UK-listed companies by 2030. These measures seem tailored to influence public sentiment ahead of the impending UK general election, potentially impacting voter perceptions and decisions. What are your thoughts on these budgetary adjustments? #springbudget2024 #finance #tax #wealthmanagement

Interested in what a Labour Government might mean for UK capital markets? Then look no further than my first blog for UK Finance. The story, at least so far, is largely one of continuity rather than change in the new government’s regulatory agenda. However, public statements suggest that Labour views competitiveness through a broader lens than the number of UK IPOs, with greater emphasis on the role that capital markets can play in delivering growth in the wider UK economy. While recent announcements on the Pensions Investment Review and National Wealth Fund send a signal that state interventions and public finance initiatives will play a greater role in mobilising institutional capital for British businesses, industries and infrastructure. Read the full blog here 👇 https://lnkd.in/eAxPNTuJ Conor Lawlor Yvonne Deane Harte Julie Shacklady Will Clamp-Gray Avanthi Weerasinghe Jaime Ricks Gabriel O-Ihama Clio Batchelor Jonathan Lima-Matthews #capitalmarkets

My followers don’t need me to spell out the key points in the budget for private markets. Nor am I a tax expert but here is my literal 2 cents. 1. They managed our expectations well and we all know we were going to be “hit” and in places like CGT and Carry they could of bigger hits (but let’s wait for 2026 when further reform is coming!). It keeps the UK as borderline competitive but that is it. 2. The chancellor did make it harder for smaller businesses and especially I feel for growth companies with NI and managing staff expectations for pay increases. Felt in places like was telling us investment is key but also making it that much harder for companies and their investors. Yes, pensions have more scope to diversify into riskier assets but will smaller VC see that £? Yes, EIS and VCT is given a reprieve form sunset clause, but made it harder for their managers. Moreover, Entrepreneurial relief and IHT got major hits. So many have said I wouldnt want to be starting a SME right now, which is sad.

I find it immoral that the money someone earns in their life is taxed when they leave this world. It’s double dipping! We’re not talking inter-generational wealth, we’re talking about me, you, my parents, yours. Who all paid tax at source. Think about it logically, you work your whole life, retire, and then when you go, someone steps in and says “we’ll have a bit of what’s left”. The thought that the Labour Budget is going to increase the tax or reduce the Thresholds is so wrong. And don’t get me started on:- - Capital Gains Tax increases - likely increase in business National Insurance. - Pension raids We need to focus on stimulating growth, incentivising people like me to set-up companies and invest in the UK. And incentivising businesses to take risks to grow the economy; Ai, ESG, Creative. Not make me think why should I bother. This next budget is looking like the Wolf in Sheep’s Clothing, and isn’t targeting the super wealthy, it’s the everyday hard working middle class who are about to get raided.

Today marks a historic moment as the Labour Government delivers its first Budget in 14 years, presented by the first female Chancellor of the Exchequer. We are pleased to support the Chancellor’s vision to grow the UK economy with her mantra to “invest, invest, invest.” Long-term investment is indeed the engine of growth, and our industry already channels £1.4 trillion into the UK economy.   Long-term investment also needs clarity of approach and policy certainty. The proposed modern industrial strategy and corporate tax roadmap are a welcome starting point to attract greater capital. We look forward to working with the Government, alongside the National Wealth Fund, to channel investment into innovation and growth-driving sectors. But this is the beginning of the journey and more will be needed to build domestic and international confidence to drive strong UK capital markets and reinvigorate economic growth in partnership. Fostering a culture of inclusive investment is also important to improve people’s financial resilience, yet today’s Budget was a missed opportunity to implement measures, which could see more people reap the benefits of investing, such as ISA reforms. We will study other aspects of the Budget, such as the intention to levy inheritance tax on unused pension fund, to ensure this doesn’t bring adverse outcomes at a time when people need to be doing more to secure their standard of living in retirement. To read our comment, click here: https://lnkd.in/eGBPWgRT

Today’s Autumn Budget highlighted once again a government that recognises the need to “invest, invest, invest” to drive long-term growth in the UK – a mission that is strongly supported by our industry.   The investment management industry welcomes the opportunity to work closely with Chancellor Rachel Reeves and her team to make the UK an attractive place to invest and do business, in turn channelling productive capital into securing the future of our nation. Investors want policy certainty. The Modern Industrial Strategy and Corporate Tax Roadmap are positive steps.   This now must include new proposals that create a culture of investment to allow more people to take advantage of the long-term benefits investing can bring, building financial resilience and supporting a good standard of living into retirement. Overhauling the ISA regime, increasing contribution limits, and ensuring the Pension Review puts investing back at the heart of pensions would be welcome steps.

Some thoughts on the implications of the General Election for UK equity markets. First and foremost, the election should be a broad positive whoever wins. Markets hate uncertainty and whilst investors may be certain Labour will win whatever the timing, getting it out of the way now is helpful as it saves 6 months of debate. The one caveat to this is if we end up with a hung parliament - paralysis would be a poor result for markets. So apart from the removal of uncertainty, what are the factors to look out for? For starters it’s worth noting that the UK market has already been rallying strongly now for some weeks and we’re finally seeing initial signs of capital inflows to UK equities from domestic and international investors (after nearly 3 years of continuous outflows). A combination of bombed out valuations, falling interest rate expectations and a wave of M&A are largely driving progress in my view. There’s a reasonable chance that the rally will attract further capital and we’ll see a virtuous circle as that fresh capital drives prices higher still. And none of that has much to do with the government or indeed the election. We’ll see what ends up in the main party manifestos in due course but with both of them claiming their strategy to fund public spending and manage debt is based on driving economic growth, one would assume the stock market and the investment capital it provides to companies will feature somewhere in the plan. Having said that, the Tories’ strategy for equity markets over the past 14 years seems to have been to enthusiastically regulate them to death, whilst Gordon Brown’s now infamous changes to pension rules in the previous Labour administration caused a calamitous flow of capital out of equities and into bonds - that capital will never return. So will they learn? My first question is whether Hunt’s recently proposed introduction of a British ISA allowance (£5k per person annually, UK- listed stocks only) makes it into either manifesto. He never looked that enthusiastic about the idea so it wouldn’t surprise me if it’s quietly dropped but we’ll see. Will Labour pick it up and run with it? I’m not convinced a tax break for the wealthy, even a very targeted and worthy one like this is going to get support. Hunt’s other plan which was to force local government pension funds to disclose their (generally very small) allocations to UK equities (and thus shame them into increasing them), might be politically more palatable for Labour - if they can make progress here, it could make a real difference, particularly if it takes place in an environment of falling interest rates and economic recovery. Ultimately however the most important factor for the market is stability. Global investors tell me they won’t allocate to the UK due to years of political instability, currency risk and so on. So whoever wins, my plea to them is to follow the doctors’ Hippocratic Oath and just DO NO HARM…. #stockmarket #investec

With the dust settling, my takeaways from the UK budget are: 1. As someone with no connection to farming it is shocking to me for the industry to be brought in to IHT at such a low threshold. If you really want to tax people with large holdings of land set the minimum at say £ 5 million. Otherwise it's pernicious ideology not economics. 2. The double taxation of pensions is a terrible policy. Withdrawals are taxed at the marginal rate of the recipient, isn't that enough ? It creates a disincentive to save, the exact opposite of what we need. 3. Most disappointing was I think the almost complete lack of imagination with pretty much zero wealth creation ideas. The country needs private capital in spades to invest alongside Government and there was virtually nothing that supported this need. Why not upsize EIS / Seed EIS ? Why not taper CGT for assets held for more than e.g. 10 years ? There are many options and tweaks available but it requires creativity and engagement.

The votes are cast, and the results are in! We have a new Government, with a stonking majority to make change, its watchword throughout the election. Rachel Reeves becomes the first ever female Chancellor, and immediately faces some major challenges with a tight fiscal situation and economic growth. What does that mean for financial services? Firstly, Labour's watchword will be economic growth. It is the first and most pre-eminent of its Missions, the central organising tenants of the next Government led by a Growth Mission Board, chaired by Chancellor Rachel Reeves with an overarching goal – to secure the fastest rate of economic growth in the G7 by the end of the Parliament. With financial services being a significant growth sector, that will mean a number of things: -         Deploying financial capital to invest in priority areas: climate and infrastructure investment; -         Reviewing how pension funds can be used to invest in Britain’s growth, and how individual pension savers can reap some of the rewards of that additional growth; -         Continuing initiatives about strengthening Britain leadership on fintech and sustainability; -         Stability: both in terms of economic institutions and business taxation. That last point is important – after both economic and political shocks, like the Truss’ budget, Labour will make a virtue of being predictable, even a little boring. But if the evolution of the Labour Party since its defeat in December 2019 has taught us anything, it will be that change will be careful, considered, and lasting. If they get on board, UK financial services can be a big part of that change.