Meanwhile the plan to scrap the non-domicile tax regime proposed by the Labour Party is likely to disappear from the agenda.
“You can cancel your tickets – at this stage it is clear Labour won’t form a government and that the ‘non-dom’ rules are not going to be subjected to the root and branch reform feared,” said Sophie Dworetzsky, a partner at law firm Withers LLP.
On Friday the Conservative Party had achieved an outright election win, confounding expectations of a hung Parliament, while the opposition Labour Party had lost a large number of seats. The former government coalition partner, the Liberal Democrats, had seen its number of seats tumble to single digits.
“Business as usual might be the order of the day from this election result” said Mark Dampier, head of Investment Research at FTSE-listed Hargreaves Lansdown.
“Anyone with plans to make pension contributions... should consider acting sooner rather than later,”
Tom McPhail, who heads pensions research at the UK’s largest execution only broker said he expected the election result to lead to further changes to pension taxation, particularly for higher earners.
“Anyone with plans to make pension contributions in the immediate future, and particularly those paying higher rates of tax, should consider acting sooner rather than later,” he said.
In their pre-election manifesto, the Conservative Party had proposed restricting tax relief on pension contributions for those earning more than £150,000 a year.
“There is currently a provision which allows an investor to contribute more than the annual allowance by ‘carrying forward’ any unused annual allowance from the last three tax years. The Conservatives have not confirmed if they plan to target this opportunity,” McPhail added.
IHT reform
David Cameron’s Conservatives have also pledged to take the family home out of tax by increasing the effective Inheritance Tax (IHT) threshold for married couples and civil partners to £1 million.
“With all the changes to the taxation of the death benefits from pensions, inheritable ISAs and the prospect of the end of deeds of variation and now the potential for a higher nil rate band, investors should be looking at their Wills and estate plans to check they are still fit for purpose,” said Hargreaves Lansdown chartered financial planner Danny Cox.
