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Tax grabs have come at a surprisingly perfect time

First Corbyn, now Covid. Wealthy people have faced numerous threats to their cash over the past year or so and they are not prepared to sit idle.
Many are already taking action to get their affairs in order and protect their savings from what is predicted to be the biggest tax grab in a generation.
Luckily the 20bn of tax rises Chancellor Rishi Sunak is rumoured to be announcing in autumn might just have come at the perfect time for them. Capital gains tax rates are currently at a historic low, property prices are high and lavish reliefs are available on pension savings. All this creates the ideal environment for wealthy people to sell off rental properties or holiday homes abroad, taking a small tax hit thanks to the low CGT rates.
Wealth managers are recommending they stuff the money into their pensions to make the most of the 40pc tax relief on retirement savings available to higher earners while they still can. They could also benefit from lower stock market prices because of falls that took place this spring.
Older people are being advised to pass on investment properties to younger generations now. So long as they live for another seven years, the gift will be exempt from inheritance tax.
Those who do nothing are likely to face much larger tax bills come the autumn Budget. After that, more than half a million people are at risk of being charged “double tax” on their pension savings.
Mr Sunak is said to be considering slashing relief for higher-rate taxpayers from 40pc to 20pc. For those who remain in that tax bracket after they retire, that would mean they only benefit from 20pc tax relief on their pension contributions yet would be charged 40pc tax on that money in retirement.
For landlords, too, it could be disastrous. The average person selling a buy-to-let property in London would pay an extra 26,840 in tax under the new plans.
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In our comments section, D Housebuilder said of Half a million at risk of ‘double tax’ on pensions in Treasury tax raid: "We all know that there are many ways for those in the top 10pc of all incomes to find ways to reduce their tax burden. The effective tax rate is typically much lower than the headline tax rate for them. It is not uncommon for very wealthy to pay an effective tax rate below 20pc due to these measures. While we may argue that they are simply being clever in reducing their tax burden, someone still needs to carry the burden of government expenditures. This is carried principally by middle-income earners who will normally pay a 20pc rate in retirement."
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