While the quarter contained mixed messages from McDonald’s golden arches, the price of gold itself reached an all-time high last week, breaking $1,980 per troy ounce on Monday.
The week ended with some startling numbers from the US, revealing that its economy shrank by nearly 33% in the second quarter compared to the same period last year.
Annual Inheritance Tax (IHT) receipts have fallen for the first time in a decade. HMRC figures released last week showed that UK estates paid IHT of £5.2 billion in 2019/20, down 4% on the previous record year1.
The decline is due to an extra tax-free allowance for family homes introduced in 2017, called the ‘residence nil-rate band’, says HMRC. The allowance rose to £175,000 in this tax year, effectively increasing the IHT threshold for married couples to £1 million. HMRC says the policy has taken 3,900 estates out of IHT entirely.
But the allowance has attracted criticism that it could push up house prices and discourage older people from downsizing. And as the government looks at ways to help cover the costs of its pandemic response, there has been speculation that the chancellor could have the allowance in his sights.
The chancellor has already ordered a review of Capital Gains Tax and has faced calls for new property taxes. The huge wealth and ‘unearned gains’ tied up in residential property could yet prove too tempting for a government that needs to fill a big hole in its finances.
The levels and bases of taxation, and reliefs from taxation, can change at any time and are dependent on individual circumstances.
1Source: HMRC Tax and NIC Receipts, July 2020
In this video, Lauren Smith, Investment Communications Specialist, reviews recent events in markets and looks ahead to what’s in store.
The Last Word
“Mr Bezos, I believe you’re on mute.”
Amazon’s CEO Jeff Bezos is prompted by US lawmakers during a digital hearing in Congress last week.
Magellan is a fund manager for St. James’s Place.
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