Amid mounting speculation over tax changes in Labour’s upcoming Budget, the law firm Thackray Williams has seen a surge in demand as individuals and businesses scramble to finalise financial plans. Concerns are high over potential increases in Capital Gains Tax (CGT) and expanded Inheritance Tax (IHT) measures, as clients rush to transfer assets, restructure portfolios, and expedite transactions before 30 October.
Sharp Rise in Tax and Asset Planning Enquiries
Elliot Lewis, Head of Private Client at Thackray Williams, reports a 200% increase in tax-related enquiries. Many clients, he notes, are exploring asset transfers to avoid possible CGT hikes. “With predictions suggesting a rise in CGT to as high as 39%, clients are urgently looking to crystallise gains while current rates still apply,” says Lewis.
The Real Estate sector at Thackray Williams has seen a similar uptick in activity, with sector head Vikki Herbert noting a 50% increase in instructions year-on-year.
She said: “Whether you can beat any increase in Capital Gains Tax will depend to a large extent on when any rise comes into effect. If Rachel Reeves announces an immediate hike, unless you have sold and completed the sale of your property on or before 29th October, you will be subject to the new rate.
“A delayed introduction may create an apparent window to complete sales while the current rates are in force. However, with many property investors nervous about the implications of leasehold reform and new renters’ rights, an increase in CGT may well accelerate decisions to disinvest.
“There is therefore a strong possibility of a glut of properties coming on the market as landlords and commercial property owners try and complete sales before any future increase. As we saw with the property boom in the pandemic, this can create bottlenecks, which still might make it ambitious to complete in time.
“The best way to manage any property portfolio is therefore to have a strategic investment plan for the long-term, rather than reacting to ad-hoc legislative and tax changes.”
Corporate Transactions Under Pressure to Complete
Corporate clients are also moving quickly, with the firm’s Corporate and Commercial Department reporting intensified activity. Department head Nick Gabay says businesses are racing to close deals previously planned for 2024.
“We’re seeing an acceleration in management buyouts and corporate restructurings to complete under the current tax framework,” Gabay notes. This urgency is echoed in the firm’s Retail, Hospitality, and Leisure sectors, where businesses are keen to finalise mergers, acquisitions, and property sales before the budget deadline.
New Focus on Pension and IHT Concerns
In addition to CGT, there are also concerns surrounding pension funds potentially becoming subject to Inheritance Tax.
Anthony Macey, Head of Private Wealth, explains, “People are now reconsidering investment strategies in light of potential IHT changes.” Macey advises that clients consider long-term tax planning that spreads investment risk to manage exposure to such tax adjustments.
Strategic Guidance for Complex Situations
Thackray Williams is recommending targeted, personalised advice to help clients navigate this turbulent period. Lewis highlights misconceptions around CGT, particularly with regards to gifting assets. “A gift is seen as a disposal for CGT purposes, even if it’s not sold, meaning there could be a CGT liability despite no sale proceeds to cover it,” he cautions. He suggests options like trusts or deferring gains through specific asset transfers, though he stresses that professional, bespoke advice is critical.
