Wednesday 24 January 2018 ShareProphets: The one stop source for breaking news, expert analysis, and podcasts on fast-moving AIM and LSE listed shares

Here's How the Budget Will Affect a Shareholder Like You

By Malcolm Stacey | Thursday 9 March 2017

Disclosure: I own shares in one or more of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Hello Share Masters. I’ve taken a long hard look at the budget from our point of view and found it improves the shareholder’s lot quite a bit. However, I’m no tax expert, so in case I’ve got anything wrong, please do your own research.

The best news for share-shifters like us is that the ISA allowance is being boosted from £15,240 to £20,000 a year. And of course the best way to keep your capital gains tax low is to keep your ISA topped up. Your profits can’t be taxed then.

The £5000 allowance for tax on dividends is to be cut to £2000. But that won’t happen for another year. This will give time to get some more of your share money into your ISA. And this follows the 28% higher rate of capital gains tax on share profits having been cut to 20%.

North Sea oil producers, like Shell (RDSA) will benefit from the budget, because Chancellor Phil promised them a tax review. As the government depends on North Sea Oil, we can expect tax on it to reduce.

Shares in some small businesses should rise, as they’re getting extra relief towards their hurtfully high business rates.

Two billion more pounds is going into social care. That should improve profits for care home companies which have seen shares suffer in recent years, as local councils cut back on their spending with independent homes.

I’ve argued for some time that the government will soon spend more on infrastructure, making companies which build motorways, roads, bridges and drainage systems, or the companies which supply them, a more attractive lure for shareholders. Well, the budget promised £90 million for road works in the grim north and another £23m for busy routes in the Midlands.

A 2% increase in cigarettes won’t make much difference to tobacco shares, but you shouldn’t be supporting them anyway. The sugar tax will come in - but an earlier announcement has already priced that change into fizzy drink shares.

Finally, a higher income tax allowance of £11,500 will probably boost the profits of firms that make luxury goods. I mean, of course, ’luxury’ in the loosest sense.

And now it's time to celebrate in the Punter’s Return.

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