Upcoming rules that could change advice landscape

This is making firms consider the potential benefits of operating within a network and this will be a solution for some, especially as the FCA are alert to the possibility of firms “phoenixing”, but networks will not accept liabilities for advice given outside of the network. 

Therefore, firms looking to join should ensure that they have adequate run off cover.

Changes announced in the Budget

The budget seems like a lifetime ago, particularly given the Chancellor has stood up several times since then to announce packages of reforms. 

So it’d be easy to forget that in the Budget there were changes that will impact your clients. 

Proposals to offer greater pay in lieu of pensions for senior clinicians in the NHS pension scheme will not be taken forward.

For instance: 

• A real boost for Individual Savings Account (ISA) annual subscription limit for children with the threshold moving to £9,000 from £4368. The adult Isa annual subscription limit does however remain unchanged at £20,000. 
• The Lifetime allowance for pensions will increase in line with CPI for 2020-21, rising to £1,073,100
• For high earners there was also significant changes announced for the tapered annual allowance for pensions. 

The pensions annual allowance is the maximum amount of tax-relieved pension savings that can be accrued in a year. 

For those on the highest incomes, the annual allowance tapers down from £40,000. 

HM Treasury has reviewed the tapered annual allowance and its impact on the NHS, as well as on public service delivery more widely. 

To support the delivery of public services, particularly in the NHS, the two tapered annual allowance thresholds will each be raised by £90,000. 

This means that from 2020-21 the “threshold income” will be £200,000, so individuals with income below this level will not be affected by the tapered annual allowance, and the annual allowance will only begin to taper down for individuals who also have an “adjusted income” above £240,000. 

For those on the very highest incomes, the minimum level to which the annual allowance can taper down will reduce from £10,000 to £4,000 from April 2020. This reduction will only affect individuals with total income (including pension accrual) over £300,000.

Proposals to offer greater pay in lieu of pensions for senior clinicians in the NHS pension scheme will not be taken forward.

The Chancellor also delivered what many had expected in the way of changes to Entrepreneurs relief – notably a reduction in the Entrepreneurs’ Relief lifetime limit. 

From 11 March 2020, the lifetime limit on gains eligible for Entrepreneurs’ Relief (which offers a reduced 10 per cent rate of Capital Gains Tax on qualifying disposals) was reduced from £10 million to £1 million.