I think we have now reached a point where even the most optimistic Conservative supporter will concede there is only one likely outcome in the forthcoming election. The only debate is the extent of the Labour mandate. In the absence of a crystal ball, let’s assume Rachel Reeves will have the majority needed to enact all of Labour’s fiscal and taxation plans.

Reeves’ base argument, reinforced in the manifesto (other than the bits and bobs around school fees’ VAT and closing certain tax loopholes) is that they will create economic growth, naturally resulting in more national income and tax receipts, which then pays for their plans for public spending as when the Tony Blair government came to power.

I’m not sure this acknowledges the entirely different state of the economy and public services Labour is inheriting versus its last time in power. It also ignores the time it might take for any stimulus measures Labour introduces to have an effect, never mind the vastly increased level of government debt. Without this anticipated growth there would seem to be no option, at some point, to revert to more traditional Labour “tax and spend policies” … perhaps even with one eye on keeping the left of their party happy.

You could argue Labour needs to win the trust of businesses and the public, and keep to the benign tax promises made. I’d counter and ask how long will this last in the face of tax receipts failing to rise as had been expected? And how would having an overwhelming majority affect this desire to please?

The Institute for Fiscal Studies has now published its view of the manifestos and concluded that on the 4th July “we will be voting in a knowledge vacuum” - highlighting the lack of any detail on any plans for taxation, spending or welfare reform. Cheery stuff.

It is reasonable to conclude that taxes will go up. It’s just a timing issue.

Trying to work out which ones is harder, especially as you need to consider changes to which taxes will actually raise revenue quickly, (which may be needed). There is various speculation around changes that might affect the clients we deal with - raising capital gains tax, bringing more assets within the Inheritance tax regime, tax relief on pension contributions, even a wealth tax. It is very hard to have any certainty.

However, from a planning perspective it gets me to the argument that if you are planning to do something anyway in the near future, get on with it.

Take gains. Pay in to pensions. Take the pension lump sums. Take dividends. Set up trusts, sell your business. Gift to your children. Sell that house. Crystallise losses. The taxes on these actions are only going to go in one direction. And it’s not down.

Longer term I can see the idea of passing on wealth sooner becoming more sensible. I’m now concluding that family wealth, rather than individual wealth, will become the conversational – and financial planning - norm.

We will be considering what actions to take with clients over the forthcoming weeks and months. If you want to discuss any matter related to your personal circumstances, should you require, please get in touch. It will be an interesting few months ahead!