MBS Newsletter & Inflation

Dear All


From the high of expectations of the lifting of final lockdown restrictions, we are now nervously awaiting the impact of ‘Freedom Day’ (which means slightly different things in the different countries that make up the UK) to see whether the freedom turns out to be a positive move or a pointer to the need for further restrictions.


We are now suffering from data exhaustion and rules exhaustion, but the time appears right to take a risk now that schools are off on holiday leading to less chance of a spread of the virus and the ability to socialise outdoors with the summer weather. The continued hoped-for success of the vaccination programme can be ramped up over the summer with the booster program beginning in September. While the world’s leaders met for the G7 summit in Cornwall in a wave of optimism allied to an upturn in summer weather, we are still far from ‘a return to normal’ as defined by life pre the pandemic.


As with the warmer temperatures, however, there are some positive developments. For one thing, as we highlight in the summer edition of our newsletter, markets are looking up. Evidence is pointing to an uptick in dividends and one-off payments to shareholders in 2021 following sharp falls in 2020. Even the worst-case scenario predicts positive change.


Looking further afield, in our feature for this edition we examine inheritance tax (IHT). As house prices continue to rise and following the Chancellor’s freezing of the IHT threshold for the next five years, increasing numbers of estates will become subject to IHT. Yet more than 50% of adults over 55 in the UK do not have any idea of how their estate will be taxed. While we may not relish looking towards the end of our lives, estate planning can help support your loved ones when you are no longer around. Our article looks at the current inheritance tax rules and how they are likely to change in the near future.


Other stories for this edition include:

·                     Tax planning for families As the freezing of several key tax thresholds heralds a decline in real income over the next five years, we look at ways for couples to maximise the use of tax allowances and reliefs.

·                     Portfolio rebalancing Choosing a set of investments for your portfolio may seem like a short-term process, but investments need to be curated and reviewed. Allowing portfolio to coast could mean the erosion of the diversity you thought you had put in place, potentially weakening your position.

·                     ‘Greenwashing’ warning As growing numbers of ESG funds promise investors both returns on their money and support for businesses concerned with sustainability and ethical practices, be warned. While legislation takes a while to catch up, you may need to look beneath the surface to check a fund’s credentials.

We are happy to talk you through any of the issues addressed in our newsletter. Our next edition will be with you in the autumn when we will be anticipating the Chancellor’s next moves in the second Budget of 2021.

One other subject not covered in the Newsletter, but which is well worth a mention, is the threat of inflation as we exit from the Lockdown. The attached appendix goes into this very important subject in more detail.

As always keep safe and be as cautious as possible even though ‘Freedom Day’ might suggest otherwise.

Thank you for your support as always and feel free to contact us if you have queries following the receipt of this newssheet or we can be of assistance on any other financial matters.

Yours sincerely


Jonathan McAlpine       Alan Smyth              Liam Rice



MBS Independent Financial Planning -Summer 2021 Financial Focus Newsletter

MBS thoughts on Inflation


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