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Daily Mail
a day ago
- Business
- Daily Mail
Borrowing costs rise as Reeves splashes cash: Nervous investors fret over spending spree
British borrowing costs edged higher yesterday as 'nervous' investors fretted over how Rachel Reeves will pay for her lavish spending spree. The yield on ten-year gilts rose as high as 4.62 per cent on speculation that the Chancellor will be forced to increase borrowing or raise taxes to make her Budget numbers add up. It eased later in the session to 4.55 per cent – thanks to weaker-than-expected US inflation boosting hopes of interest rate cuts across the Atlantic – but remained the highest in the Group of Seven major industrialised nations. This means that Britain is paying more to borrow on international bond markets than every other leading developed economy on Earth. Oliver Faizallah, an analyst at wealth manager Charles Stanley, said: 'Markets remain nervous about the potential for either higher taxes or an increase in borrowing in the future. 'An increase in taxes may be seen as more market-friendly, but would be politically damaging, while an increase in borrowing would put further pressure on already elevated gilt yields. Fiscal concerns in the UK will no doubt keep gilt yields higher for longer.' He noted that the easing in gilt yields after early rises 'had nothing to do with the spending review but came on the back of lower-than-expected inflation in the United States'. US inflation nudged up only slightly from 2.3 per cent in April to 2.4 per cent in May, lifting pressure on bond yields around the world. The mood was further boosted after US President Donald Trump declared that a US-China trade deal is 'done' – an announcement that suggested tensions between the world's two largest economies were thawing. It was not enough, however, for the FTSE 100 to close at new highs, with the index ending the day up just 0.1 per cent at 8864.35, having spent much of the session above March's record close of 8871. Investors warned that doubts remain over Labour's handling of the economy – and the outlook for tax, spending and the public finances. 'Another fiscal event goes by with little resolved in terms of allaying investor fears that fiscal policy is on a sustainable footing,' said Neil Mehta, portfolio manager at capital market company RBC BlueBay Asset Management. 'With Labour's favourability rating in free fall with the public, the Government is bending to political pressure and proposing a raft of spending measures, seemingly taking their eye off the ball regarding fiscal responsibility. 'Until fiscal policy is brought back on a sustainable path, investors will continue to demand a higher premium for investing in UK assets, such as gilts, than peers.' Gordon Shannon, a fund manager at Twenty Four Asset Management, said he was 'disappointed that there wasn't more clarity' on how the Chancellor intended to meet her fiscal rules. Matthew Amis, investment director at Aberdeen, said that Reeves yesterday had 'offered just enough detail and security for the gilt market to focus away from the UK's fiscal situation until the autumn at least'. But he added: 'Scrutiny will be high and any mis-step from the Chancellor will be reflected in higher gilt yields. 'Big decisions are required from Chancellor Reeves in the autumn.' Ian Stewart, chief economist at Deloitte, said: 'The autumn Budget will be the big test of whether the Government's fiscal plans are holding in the face of global economic headwinds.'
Daily Mail
30-05-2025
- Business
- Daily Mail
I have £20,000 in shares from an old employer, can I cut my capital gains tax bill?
I have £20,000 worth of shares held outside of an Isa from an old employer's share save and employee share schemes dating back to when I worked there between 2008 and 2014. I would like to sell the shares and reinvest the money into more diversified investments but think I will end up with a big tax bill, even though I am a basic rate taxpayer. I have been reinvesting dividends and buying more shares regularly throughout the ownership. What do I use as the purchase price for capital gains tax – each individual share price or an average? And is there any way that I can cut my tax bill if I sell? The shares are held as certificates, if I keep hold of them, can I move them into an investment account? Rob Morgan, chief analyst at Charles Stanley Direct, replies: Gains on shares purchased at various points through additions such as reinvesting dividends can appear be something of a tax headache. However, if you have kept good records the calculations in most circumstances aren't too bad. Capital gains tax rules First the basics. Capital gains tax (CGT) is a tax on any profits made on investments, and as you are aware you will be potentially liable on the sale of shares held outside a tax-efficient account such as an Isa. The amount of tax you're charged depends on which income tax band you fall into. For the 2025/26 tax year, rates of CGT are 18 per cent and 24 per cent for basic and higher rate taxpayers respectively. This rate applies to the profit made – so sale proceeds minus the cost of purchase. > What is capital gains tax? Read Charles Stanley Direct's guide Not widely understood is the interaction of CGT with income tax bands. If you're a basic rate taxpayer, any gain taken when added to your income could push you into the higher-rate bracket. If so, you'd pay 24 per cent on however much of the gain falls into the higher income tax band when added to your income, and 18 per cent on the portion below it. If you are a Scottish taxpayer your CGT rate depends on the rest of UK income tax bands and not the Scottish tax bands. You'll only need to pay tax if your realised profits in a tax year exceed the annual capital gains tax allowance. In the 2025/26 tax year, this is £3,000. For example: If you bought shares for £10,000 and sell them this tax year for £30,000, then you've made a capital gain of £20,000. If you have no other gains, this is reduced to £17,000 as the first £3,000 falls into the CGT annual exemption. For a basic rate taxpayer (with income and gains falling below the higher rate tax band) the tax liability is £17,000 x 0.18 = £3,060 However, if the gain tips you into the income tax higher rate band then you pay the higher rate of CGT on the portion over the threshold of £50,270. For this reason, many basic rate taxpayers can end up paying mostly higher rate CGT on large gains. Calculating CGT from multiple purchases Calculating the gain on shares and the tax to pay is reasonably straightforward if you have the figures to hand. In most circumstances you just need to know the number of shares and the total amount paid for them by adding up all the purchase transactions. You then net the total cost of the sale proceeds (after any fees such as stockbroking commission) to calculate the gain. When making multiple sales the purchase cost simply applies on a 'pro rata' basis to each sale. The main exception to this 'pooling' rule is the 'same day' rule whereby shares acquired on the same day as the disposal are taken account of ahead of any others. There is also the 'bed and breakfasting' or '30 day' rule whereby any shares repurchased within 30 days cancel out the gain or loss generated by the prior sale – but not if repurchased in an Isa. However, it appears neither of these apply in your circumstances. As with many tax matters, there are examples and help sheets on the HMRC website that can help, but as with any tax issue if you are in any doubt you should consult a qualified tax specialist. Ways to minimise CGT To mitigate CGT there are some strategies you can adopt. If the capital gain, and therefore the potential tax liability, is significant you can consider taking advantage of the CGT allowance over multiple tax years. The allowance has been much diminished and now stands at just £3,000, but selling an asset in bits over time can help minimise CGT. You can't do that with a second property or an antique of course, but you can with shares and funds. If you are planning to keep some or all your holding you can consider using the £20,000 Isa allowance to at least protect it from tax going forward – both in terms of income tax on dividends and any future gains. The process here is known as a 'Bed & Isa' which can help use your CGT and Isa allowances simultaneously. A Bed & Isa involves selling holdings and then buying them back in an Isa account. The sale part generates a capital gain, so selling or partially selling an existing investment could help with tax planning by using some of your capital gains allowance while keeping your holding. > Bed & Isa and other Isa rules to make your life easier: Charles Stanley's guide Outside of an Isa or pension you are prevented from generating gains in this way owing to the 'bed and breakfasting' rule mentioned above. This highlights that prevention is often easier than cure when it comes to CGT. Buying shares in an Isa, or transferring them in at the earliest opportunity, is often the best way to avoid storing up problems further down the line. One valuable tactic that many people miss is the special rules around transferring eligible shares from a save as you earn (SAYE) or share incentive plan (SIP) scheme tax free into an Isa within 90 days of acquisition. Potentially, it's a great way to use your Isa allowance and shelter up to £20,000 of a holding from tax. Another strategy to reduce CGT involves transferring some of the asset to a partner if you are married or in a civil partnership. You usually don't pay capital gains tax on an asset you give or sell to your husband, wife or civil partner, and this could give you the option of using two CGT allowances each tax year. A couple, for instance, could realise gains of up to £6,000 this tax year without paying tax. You could also consider dividing the shareholding in such a way to take advantage of lower tax bands where one partner's income is lower. This way there may be less tax to pay on the gain as more of it falls into the basic rate band than the higher rate band for one of the pair. Finally, if you have any losses on investments elsewhere you may have opportunity to set these off against gains. If you sell an asset for less than you paid for, you can report that loss to HMRC to offset against any gains you've made in the same tax year. You have up to four years from the end of the tax year in which the loss occurred to make a claim. This can reduce your overall taxable gain and in some circumstances bring it below the annual CGT allowance. Keeping the shares It can be difficult to know whether to sell a shareholding with a tax liability attached to it. Much depends on the outlook and reliability of the company in question and the level of risk the holder is happy with. The rule of thumb is that the tax tail shouldn't wag the investment dog, and in the case of a large single stock position it can be wise to diversify to limit the impact if it falls in value. That's especially the case if a drop could have a big impact on your financial resilience. Having your financial future heavily influenced by one business is a risk most people wouldn't be willing to take – unless they are inexorably attached to it through ownership or otherwise have significant confidence in the prospects. A diversified approach won't guarantee a better result, but it's far less risky. Ideally, a careful strategy around sales can help minimise the tax burden and smooth the path towards that. We have only seen the tax burden ratchet over time, and it seems a forlorn hope that it might reverse direction, at least in the near term, so from that perspective there may be nothing to be gained by putting off the issue. However, if you decide to keep your shares, contact your stockbroker or investment platform to see if they can help with 'dematerialising' them. In other words, converting them from a physical certificate into electronic form. This will make things easier to manage going forward if you want to keep them. It will also mean future sales are easier to execute and will cost less as brokers generally charge a lot more for a certificated sale. You'll have to fill in some paperwork to do this and wait a short period for the process to complete. For instance, at Charles Stanley once the original share certificates and signed transfer forms are received we would expect the holdings to be deposited in an online account within 5 to 10 business days under normal circumstances.
Yahoo
26-05-2025
- General
- Yahoo
Martinsburg community pays tribute to veterans on Memorial Day
MARTINSBURG, (DC News Now) — In West Virginia's eastern panhandle, the local community took time to pay tribute to service veterans this Memorial Day. At War Memorial Park, those who wore the uniform were saluted. Memorial Day: How it came to be, how it evolved 'West Virginia's per capita participation in the armed forces is more than any other state,' said Gunnery Sergeant Charles Stanley. 'For as small a state as we are that's a lot of support. You'll especially see it in November when we have the Veterans Day parade.' The state's Department of Veterans Affairs estimates that one in 10 in the Mountain State has enlisted or was drafted to serve in the armed forces. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
04-04-2025
- Business
- Yahoo
Have you maximised your allowances ahead of the tax year-end? Here's how readers voted
Ahead of the tax-year end investors are encouraged to make the most of their annual tax-efficient investment allowances before they reset. That includes the individual savings account (ISA) allowance, which allows savers to shelter up to £20,000 a year tax-free, in cash or investments, such as stocks. Data released by the Bank of England on Monday showed that households deposited an additional £3.6bn into ISAs in February. However, research from investment management company Charles Stanley, released on Wednesday, found that a quarter of ISA holders were unaware of the deadline for their yearly allowance. Read more: Best cash-saving deals as Bank of England holds interest rates Nearly a fifth (18%) of respondents to the research, conducted by Censuswide in a sample of 3,000 "mass affluent" consumers, said they know that they can't fulfill the full allowance so don't pay anymore into their ISA than they already do. Meanwhile, 7% said that they forget about deadline and then rush to top up their ISA before it's too late. Rob Morgan, chief investment analyst at Charles Stanley, said that ISAs are the "Swiss army knife of financial planning and can be used for nearly everyone's needs and priorities. Yet there are clearly many who don't know about the ISA deadlines in place. This raises concerns over how many are taking true advantage of their ISA allowance to maximise their savings and build superior compound gains." At the beginning of the week, we asked Yahoo Finance UK readers if they had maximised their allowances before the tax-year end. We received 316 votes, with 39% of respondents saying that they had, while 52% had not and 9% were unsure. Read more: How Trump's tariffs will impact your finances and the UK economy What you need to know about investing in VCTs What April's rise in household bills means for your savingsSign in to access your portfolio
Forbes
28-03-2025
- Business
- Forbes
7 Myths About ISAs – And The Truth Behind Them
More than 22 million adults currently hold at least one Individual Savings Account (ISA) according to HMRC – yet many of us still don't fully understand how these tax-efficient savings accounts work. We approached five personal finance experts to share – and dispel – the most common misconceptions they've encountered around ISAs to set the record straight. 1. 'You need a lot of money to open an ISA' According to Brian Byrnes, head of personal finance at Moneybox, many savers mistakenly believe you need a large amount of money to open an ISA. And this can be off-putting, especially if you're starting to save for the first time. Actually, you can open an ISA with as little as £1, and how much you save thereafter – up to your annual tax-free allowance of £20,000 – is up to you. Byrnes comments: 'By consistently setting money aside, you can take advantage of interest rates and compound growth to maximise your returns. The key is to start early and make saving a habit.' Many providers, including Moneybox, Monzo and Plum, also allow you to 'round-up' the spare change from everyday purchases, and deposit it in an ISA automatically. Pro Tip Transfers are permitted from a cash ISA into a stocks and shares ISA – and between stocks and shares ISAs – without the transfer counting towards your annual ISA allowance 2. 'Once you choose an ISA provider, you're locked in' According to research from the investment platform Charles Stanley, almost a fifth (19%) of adults believe that, once you've opened an ISA with one provider, you're locked in forever. But this is not the case. Charlotte Kennedy, financial planner at Rathbones group, explains: 'ISAs have become more flexible over time, and you are always able to transfer to alternative providers.' That said, if you've opened a fixed rate cash ISA, you'll need to wait until the end of the term before you can transfer the balance – or face an early withdrawal charge. When you open a new ISA, you will need to complete an ISA transfer form with the new provider if you have an existing balance you want to move over. Simply taking out the cash and paying it into a new ISA without using this process means you will lose the tax-free benefit. 3. 'An ISA is just a cash savings account' In the minds of many savers, ISAs are just another place to put your cash. While this is true, ISA offerings go much further. First, interest earned on cash held in ISAs is paid free of tax. Second, ISAs aren't limited just to cash savings – you can also invest in the stock market through a stocks and shares ISA, again with a £20,000 annual limit. Any dividends you earn on shares in an ISA are paid to your account tax-free, while any capital gains you earn by selling investments held in an ISA are exempt from Capital Gains Tax (CGT). 19% of UK adults believe ISAs are only for cash savings.' – Charles Stanley survey, February 2025 Since, according to Charlotte Ransom of Netwealth, the average ISA holder typically maintains their account for five years or more, many savers who currently hold cash ISAs may benefit from a stocks and shares ISA. That's because, over five years or more, investing in the stock market tends to produce greater returns than cash savings. Charlotte Kennedy of Rathbones says: 'There is also a risk with holding cash for long periods of time that its value can be eaten away by inflation.' Just remember that, when you invest, there are no guarantees, and the value of your investments can go down as well as up. Tax treatment depends on one's individual circumstances and may be subject to future change. The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of tax advice. If you want some money for short-term goals of less than five years, stick to cash for that part of it, and use investments for the longer-term ones – so use both cash and stocks and shares ISA accordingly.' – Rob Morgan, chief investment analyst at Charles Stanley 4. 'ISAs are the only way to protect your savings from tax' In the past, most UK savers paid tax on any interest they earned on non-ISA savings accounts. But things changed in 2016, with the introduction of the Personal Savings Allowance (PSA). Now, basic rate (20%) taxpayers can earn up to £1,000 in interest each year before tax kicks in. For higher rate (40%) taxpayers, the allowance is £500, while additional rate (45%) taxpayers do not get any PSA. Thanks to the PSA, many savers are not liable to pay tax on the interest they earn – regardless of whether or not they're using an ISA wrapper. If your savings account paid interest at 4% AER, for example, you could save up to £25,000 before breaching your PSA. In other words, if you're looking to shield your cash savings from tax, you might not need an ISA. Nick Perrett, chief executive officer of wealth management app Prosper, comments: 'I suspect that many people are using ISAs when they don't need to. 'Pay attention to the interest rate, because if you're not paying tax anyway, you might be sacrificing a higher interest rate but not actually getting any benefit.' Pro Tip In the UK, basic rate taxpayers can earn up to £1,000 interest from their cash savings each year without having to pay any tax Meanwhile, when it comes to shielding your savings from tax, ISAs are not the only option. If you're saving for retirement, and don't plan on touching your money for decades, a Self Invested Personal Pension (SIPP) could be a better fit. Savers can contribute up to £60,000 to a SIPP each year, and receive tax relief on their contributions (remember that employer contributions count towards this total). In practice, this means for every £80 a basic rate tax payer contributed to their SIPP, the government will add an extra £20 in tax relief. 5. 'If you don't use up your ISA allowance, you can carry it into the next tax year' According to the experts, many savers are unsure of how their annual ISA allowance works. One key misconception is that if you don't use the full £20,000 allowance in one tax year, you can 'carry over' the unused portion into the following year. If you don't use up your annual ISA allowance, you lose it every year. So it's a good idea to think about ways you can take advantage of your allowance if you can.' – Charlotte Ransom, chief executive officer at Netwealth Unfortunately, this isn't the case. Each tax year, on 6 April, your ISA allowance resets – regardless of how much you paid into ISAs during the previous tax year. In other words, it's a case of 'use it or lose it'. 6. Myth: 'ISAs are only for adults' ISAs aren't just for grown-ups. With a Junior ISA – or JISA – parents and guardians can save up to £9,000 on behalf of a child each tax year. Just like their adult counterparts, any interest, capital gains or dividends earned through a JISA is shielded from tax. Nick Perrett of Prosper says: 'It surprises me how many people with kids have never heard of a junior ISA. 'A lot of people will be saving for their kids, but if they don't know that the JISA exists they won't be doing it in a tax-efficient way.' According to AJ Bell research, UK children collectively hold around 1.25 million junior ISAs – a fraction of the 22.3 million adult accounts that are currently active. Two types of JISA are available: Cash JISA Stocks and Shares JISA Children can hold multiple JISAs at once, and parents can split the annual allowance between cash and investments however they like. 7. Myth: 'Current ISA rules are set in stone' The ISA wrapper has been around since 1999, and although the basics have remained the same, it has undergone several key changes. In 2011, for example, the Junior ISA was introduced, opening a new route for parents and guardians to save on behalf of their children. Later, in 2017, the Lifetime ISA entered the scene, with the goal of helping first-time buyers get on the property ladder, and helping individuals save for retirement. Just last year (April 2024) changes came into effect that allowed savers to open and pay into more than one of each ISA type every tax year – which wasn't previously permitted. And further changes could be on the horizon. In her Spring Statement, Chancellor of the Exchequer Rachel Reeves said the government is considering ISA reforms that aim to help savers 'get the balance right' between cash and investments. Charlotte Kennedy of Rathbones, says: 'The Chancellor has indicated that any changes to ISA allowances will be looked at again later in the year, so although ISAs are safe for now we would expect some tweaks in the near future.' But since nobody has a crystal ball, it's best to make the most of the current rules, rather than attempting to plan around future regulation. Brian Byrnes of Moneybox says: 'Instead of trying to anticipate policy shifts, it's best to make informed choices based on your current needs and long-term plans. 'That said, it is always worthwhile doing what you can to maximise your contributions before the end of the tax year to make the most of the annual £20,000 tax-free allowance you are entitled to this year.'
