Waveney McKenna

The budget is unlikely to bring much joy to individuals but may well give markets confidence that the defit will be brought under control. As most will be aware this is likely to be acheived using a combination of increasing taxes, reducing Government spending and curtailing tax planning methods.

In view of the forthcoming budget, it may be as well to look at selling assets to create a capital gain. There is the possibility of the annual allowance of £10,100 being reduced or the 18% tax charge being increased. The capital gain could then be added to income and taxed at your highest marginal rate. Either way, creating gains now should allow allowances to be used and in the worse case, the 18% tax charge is better than most of us pay in income tax.

The Liberal manifesto covered their wish to remove higher rate tax relief on pension contributions. If this were to be the case then pensions as we know them would cease to be attractive for many, however, this could well happen and bringing forward any planned pension contributions may prove beneficial.

Markets may also respond quite favourably to a credible method of reducing the annual deficit, in addition, should inflation take hold then traditionally markets tend to perform well as inflationary pressures can be passed on (to the consumer). Much perhaps depends on wage inflation which remains quite benign, however, making ISA payments sooner rather than later in the year is worth considering.