Wealth Planning Under Labour: Key Insights from HNW Advisor Manchester

Christopher Noel Opens Second Annual Event with Bold Predictions and Strategic Guidance

Christopher Noel of Mills & Reeve delivering keynote address

The second annual HNW Advisor Manchester Conference, held at the prestigious Manchester Hall on 15 October, brought together the North West's leading wealth planning professionals for a comprehensive examination of the rapidly evolving tax landscape under the Labour government. The event, themed "Shaping the Future of Wealth Advisory," kicked off with a thought-provoking opening keynote from Christopher Noel, Partner at Mills & Reeve.

Déjà Vu and Rising Concerns

Noel, whose Manchester team holds Tier One rankings in both Chambers High Net Worth Directory and Legal 500 for the Northwest, opened with a striking observation that resonated throughout the packed venue: "I don't know about you, but I'm certainly feeling a bit of déjà vu." He highlighted how advisors find themselves in remarkably similar circumstances to the previous year, with clients rushing to make gifts and implement succession planning ahead of anticipated tax changes.

The context couldn't be more stark. Despite Labour's efforts to fill a £22 billion deficit in their first budget, the government now faces a £30 billion shortfall. This has prompted Chancellor Rachel Reeves to publicly distance herself from previous manifesto commitments, stating on the Today programme that "the world has changed" and she can no longer stand by pledges not to raise taxes on working people.

Capital Gains Tax: Where Might We Go Next?

Noel's analysis of Capital Gains Tax proved particularly engaging. Following the October 2024 rate increases from 10% to 18% at the lower rate and 20% to 24% at the higher rate, he suggested further increases are likely. "The highest income tax rate is obviously 45%, so we'restill quite far away from that at 24%," he noted, highlighting considerable room for additional rises.

His LinkedIn polling of wealth management professionals revealed surprising optimism, with 54% predicting no change to CGT rates in the November budget. However, Noel expressed concern about several potential reforms, including restrictions on private residence relief for high-value properties and the possible removal of the CGT uplift on death where inheritance tax reliefs also apply.

The Inheritance Tax Shake-Up

The conference heard detailed analysis of the substantial inheritance tax changes introduced in October 2024, particularly the controversial £1 million cap on Business Property Relief and Agricultural Property Relief. Noel emphasised the urgency for business owners and farmers, noting this creates a significant planning window before the changes take effect in April 2026.

"After April, you'll have tax at 20% on BPR assets," Noel explained. "The allowance doesn't apply to AIM shares anymore, which makes you start to think—does the treatment of AIM shares now seem unfair compared to other BPR products?"

He also flagged growing concerns about potential restrictions on lifetime gifting, including speculation about extending the seven-year rule to ten years or introducing a US-style lifetime cap on gifts. His polling showed professionals were deeply divided on these prospects, reflecting genuine uncertainty in the market.

Pensions in the Crosshairs

The pension reforms announced in 2024—bringing pensions into the inheritance tax net from April 2027—represented one of Labour's boldest moves. Looking ahead, Noel suggested further changes may be on the horizon, including potential reforms to pension tax relief. He noted that Rachel Reeves herself previously proposed a flat rate of 33% tax relief on pension contributions, potentially raising between £3-15 billion in revenue.

Noel also highlighted the possibility of employer National Insurance contributions being applied to pension contributions, which could raise an eye-watering £23.8 billion—a figure that drew audible reactions from the audience.

Property, Wealth Taxes, and the Long View

The keynote addressed emerging themes around property taxation, including potential reforms to Stamp Duty Land Tax and Council Tax, and controversially, the possibility of applying National Insurance to rental income. "Politically, it might be an easy sell—big bad landlords," Noel observed with characteristic candour.

On wealth taxes, Noel suggested they remain unlikely in the immediate term but questioned whether they represent the direction of travel. He drew particular attention to academic proposals for "one-off" wealth taxes—designed to be unexpected and credibly singular to prevent avoidance behaviour.

Predictions for 2025 and Beyond

Closing his presentation, Noel offered his "galaxy brain" predictions: CGT rates rising to 25-28%, possible restrictions on private residence relief, the seven-year gifting period extending to ten years, and modest income tax rate rises. He also cast his gaze further ahead, contemplating how artificial intelligence, demographic shifts, and global instability might reshape the taxation landscape entirely.

Throughout the keynote, Noel struck a careful balance between analysis and humour, repeatedly acknowledging Rachel Reeves' warning that "a lot of people claim to know what's going to be in the budget...a lot of them are talking rubbish." His self-deprecating conclusion—thanking the audience for listening to his "highly irresponsible talk"—drew appreciative laughter while reinforcing his central message: clients must seek proper legal and tax advice before making any major decisions.

The Manchester Conference continued throughout the day with sessions covering risk management, international relocation strategies, succession planning, and specialist topics including sports and media wealth management, providing attendees with comprehensive insights for navigating an increasingly complex advisory landscape.