Borro, the secured lending platform to wealthy clients, has expressed concern that Chancellor Philip Hammond might be tempted to expand the reach of Capital Gains Tax to include luxury assets, while the nation’s focus is on saving for the likely Brexit payment and funding issues within the NHS.
Paul Aitken, CEO of Borro, said that while he expects few surprises in this Spring budget, he is keen to see the government continue to support the firm’s clients’ needs.
He said: “Current economic uncertainty has provided opportunities for those bold enough to take investment risks in both the financial and luxury asset markets, however, there are some concerns for our clients.
“We’ve seen suggestions from the likes of EY that a new Capital Gains Tax (CGT) rate will be placed on luxury assets, and we would be disappointed if this was announced on Wednesday. Many of our clients have made significant investments in collections of assets such as fine art and classic cars and would be severely affected. For this reason, we are hopeful this won’t be on the cards, and would welcome any move which lowers the financial burden of CGT on our clients.
“In addition, most of our clients are business owners themselves, and a large majority turn to us for liquidity needs to cover urgent financial pressures such as tax obligations.”
Aitken added: “We understand the government is looking to simplify taxes, and the roll out of ‘Making Tax Digital’ by 2020 will undoubtedly help, however we are still seeing a number of clients approach us for help with unexpectedly large bills from HMRC.
“Our top clients borrow an average of £317,000 to cover tax bills, so it will be interesting to see if the Chancellor announces any short term measures to limit sudden, unplanned demands.”