Inheritance tax and capital gains tax increases are among the top five budget concerns for basic and higher-rate taxpayers, according to Hargreaves Lansdown polling.
The wealthy firm surveyed 2,000 adults last month ahead of Labor Chancellor Rachel Reeves' October 30 Budget. The budget will need to fill a £22bn fiscal black hole left by the previous Conservative government. 
Labor has said it will not increase income tax, value added tax or national insurance in its first budget in 14 years.
However, he has not ruled out the possibility that capital gains, inheritance taxes and other taxes on pensions will rise.
According to research by asset managers, the top five biggest budget concerns for basic rate taxpayers are:
Increase in income tax — 15% Increase in council tax — 11% Increase in VAT — 8% Increase in customs duties affecting drivers — 8% Loss of inheritance tax deductions or exemptions — 5%
income tax
Basic income tax rates range from £12,571 to £50,270 and are paid up to 20% of wages. The top rate threshold is between £50,271 and £125,140. Income above this level is subject to an additional 45% tax rate.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said:
“This means that every time wages rise in line with inflation, more people will pay more taxes, and more people will pay higher tax rates. .
“The threshold has been frozen since April 2022, and by the end of the freeze in 2028/29, there will be 3.7 million fewer taxpayers and 2.7 million higher rate taxpayers than if there had been a deduction or threshold. The number of additional rate taxpayers will increase by 600,000.''It is indexed to inflation and the threshold for the additional rate remains at £150,000. ”
inheritance tax
There is no inheritance tax on estates worth less than £325,000.
However, after that, the standard tax rate above this threshold will be 40%, although agricultural land, companies, some stocks and pensions will be exempted.
Last year, the tax raised £7.5 billion and affected 4.4% of death estates in the 2021-22 tax year.
Tax experts say that while the standard has been frozen since 2009, more people have become caught up in the tax as property prices have risen in that time.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, added:
“This includes making millions of estates free from tax. For example, if you leave your home to your children or children, the first £325,000 of your estate and £175,000 of your estate will be exempt from tax. Such as the zero tax rate band that can remain.
“The law also includes a rule that anything you leave to your spouse or civil partner is tax-free, and if you leave everything to them, you also take your interest rate to zero, so they can This means you will be able to leave £1 million tax-free.
Morrissey points out that: “These allowances and exemptions make a difference to so many people that any changes could cause a backlash and push them down the list. However, these rules are not written in writing and cannot be fully implemented. cannot be excluded.
“Inheritance relief also includes the fact that pensions can be exempted from inheritance tax. Changing the inheritance tax treatment of pensions would bring them into line with other products such as ISAs.
“The government may think this is a no-brainer and there are reports that the prime minister is seriously considering this.”
The top five concerns for high-rate taxpayers are:
Income tax increase — 12%
Elimination of tax deduction on pension contributions – 10%
Loss of inheritance tax deduction or exemption — 8%
Increase in capital gains tax rate — 7%
Higher VAT — 7%
capital gains tax
Official figures show capital gains tax was paid by 369,000 people who made profits worth £80.6bn in the 2022-23 tax year.
The levy raised £14.4bn last year, 15% less than the previous tax year, mainly due to falling property prices.
Capital gains tax depends in part on your income tax rate. If your profits and annual income are within the basic rate tax deduction range, you pay 10% on your profits. However, unless it is due to the sale of residential property, in which case you will pay 18%.
Higher or additional rate taxpayers pay 24% on profits from residential real estate and 20% on profits from other assets. The interest rate associated with the investment fund is 28%.
“Around 7% of high-rate taxpayers are concerned about an increase in the rate of capital gains tax they pay on profits earned from investments,” said Mr Coles of Hargreaves.
“We are already seeing investors taking action ahead of anticipated capital gains tax changes.
“The concern is that the tax rates will go from 10% (18% of assets) for basic rate taxpayers, 20% (24% of assets) for high surcharge taxpayers, to 20%, 40%, 45% of income tax rates. %.
