Podcast Summary
Mint Mobile lowers price for unlimited data, 1800flowers offers Mother's Day sale: Mint Mobile defies industry trend by lowering unlimited data price, while 1800flowers offers savings on Mother's Day items. Simplification efforts in taxes noted by experts.
Mint Mobile, represented by Ryan Reynolds, is going against the trend of price increases in the wireless industry by decreasing their price for unlimited data from $30 to $15 a month. Simultaneously, 1800flowers is offering a Mother's Day sale with up to 40% off select items. In the world of taxes, the budget edition of The Feet Money Show discussed the budget measures, including the increase in personal allowances and the rise in National Insurance for the upcoming tax year. The tax director of the Treasury's Office of Tax Simplification and policy director of the Chartered Institute of Taxation, John Whiting, was pleased to see some progress in simplifying taxes. Mint Mobile's price decrease and 1800flowers' Mother's Day sale offer contrasting responses to economic events, illustrating the importance of both cost savings and celebratory gestures.
Impact of personal tax allowance increase on higher-rate taxpayers: The Chancellor's personal tax allowance increase to £12,570 in 2022-23 is significant, but the use of Consumer Price Index (CPI) inflation for future tax increases could lead to more people being dragged into higher tax brackets, limiting the effectiveness of the announcement for higher-rate taxpayers.
The Chancellor's recent announcement of a personal tax allowance increase to £12,570 in 2022-23 is significant, but the impact on higher-rate taxpayers and the potential use of Consumer Price Index (CPI) inflation for future tax increases could lead to more people being dragged into higher tax brackets. The Chancellor tried to assure that no one would be pulled into higher rate tax, but the use of CPI inflation for some thresholds could result in earnings growth being outpaced, leading to fiscal drag. The personal allowance increase, while beneficial, may not fully offset this effect. Overall, while the announcement is a step in the right direction, the potential impact on higher-rate taxpayers and the use of CPI inflation for tax increases could limit its effectiveness.
Chancellor's budget assumptions and unexpected inheritance tax measure: The budget focused on assumptions of no real wage growth and fiscal drag, with an unexpected inheritance tax reduction that may not benefit all beneficiaries equally.
Key takeaway from the budget discussion is that the chancellor's assumption of no real pay rise for people and the continued existence of fiscal drag were the main themes. However, an unexpected measure stood out, which was the reduction of inheritance tax by 10% to 36% if at least 10% of an estate is left to charity. Although it was presented as a way to encourage charitable giving, the measure is less generous than it first appeared and may even leave beneficiaries worse off due to the value of the donated amount exceeding the tax saving. The complexity of the inheritance tax system and the oversimplified example given during the discussion raised questions about the effectiveness and fairness of the new tax measure. Simplification of the tax system was emphasized as a desirable goal.
New inheritance tax rule adds complexity for large estates: New inheritance tax rule requiring 10% to charity creates complexity and potential costs for those with large, illiquid assets, with potential relief from consultation still uncertain
The recent inheritance tax change, which requires individuals to leave 10% of their estate to charity to qualify for the main rate of inheritance tax, has created complexity and potential difficulties for those with large, illiquid assets. If the value of an estate increases significantly before death, the 10% requirement may no longer be met, necessitating the need for solicitors and potential deed of family arrangement adjustments. While the government's intent is to increase charitable giving, the impact on individuals and their heirs may outweigh the benefits. The proposed changes to make it easier to leave assets to charities and the potential gift aid relief on donations are subject to consultation and may not provide significant relief for some time. Ultimately, the cost and complexity of making necessary variations to wills may not be worth it for many individuals, and a complete review of inheritance tax could be a more effective solution.
Expanded tax incentives for larger companies in UK budget: The UK budget increased tax relief for EIS investments in larger companies to £1,000,000, expanding opportunities for finance for SMEs with assets under £15m and fewer than 250 employees.
The UK budget introduced expanded tax incentives for grown-up investors willing to back higher-risk investments in larger companies through the Enterprise Investment Scheme (EIS). This change doubles the amount of tax relief to £1,000,000 and opens up opportunities for larger companies with gross assets of up to £15,000,000 and fewer than 250 employees to join the scheme. This expansion aims to address the issue of a limited pool of eligible companies and could potentially provide more finance opportunities for small to medium-sized enterprises. However, it's important to remember that EIS investments carry risks, and investors should be aware of the potential for higher losses.
Government urged to review tax relief for AIM shares in ISAs: Call for government to consider extending tax relief to AIM shares in ISAs, as investors demand access and AIM has proven success
There is a call for the government to review the privileges of AIM (Alternative Investment Market) shares, specifically in relation to Individual Savings Accounts (ISAs). The speakers on a recent FT Money podcast expressed their surprise that despite the demand from some smaller company investors to invest in AIM companies, the government has shown little interest in extending tax relief to AIM shares. They suggested that this could be a worthwhile exploration, as AIM is well-established and has proven success, despite its slightly less marketable nature. The speakers also noted that columnist John Lee has been campaigning for this extension. Overall, there is a belief that a review of the privileges of AIM shares could result in a useful extension for investors.
