Is Now the Time to Cash in on your Company Shares?
If you’ve worked within the big tech space over the course of your career, you’ve likely seen you’re your company shares fly. With market sentiment shifting and rumours of an increase in Capital Gains Tax, here’s why I think you should be seriously considering cashing in:
With a new labour government recently coming into power, one of their main objectives is to improve public welfare. However, with an already mounting debt pile, when Rachel Reeves publicly announced a £22bn hole was ‘covered up’ by the Conservative government, it’s even more clear that their new plans need to be funded from somewhere. And in my opinion, this hole has given them the perfect reason to make a few changes to your taxes.
They’ve already promised not to raise income tax rates, so where can they go next? If you believe what you read in the news, a lever that is being rumoured to pull is adjusting Capital Gains Tax from a flat 20% to your marginal income tax rate. Meaning for some of you, the tax bill you will be sitting could double overnight. But at the same time, only targeting those in the economy with Capital Gains.
Their first budget has been announced on the 30th of October…
On the other side of the pond in the US, we’ve seen a potential change in sentiment after a historic rally fuelled an AI Arms race. The result of which gave us three companies of market caps over $3tn (each larger then every company in FTSE100 combined) and at one point in 2023, the ‘magnificent 7’ made up over 50% of the NASDAQ.
However, with huge valuations, come even bigger expectations. With earnings season underway, we’re already seeing the market jitter. The NASDAQ is down 10% from its highs and companies reporting healthy earnings such as Google still saw a 10% sell off as earnings growth didn’t meet expectations. Warren Buffet has already cashed out on 50% of his Apple stake.
Partnered with poor US employment data released on Friday, the Nikkei has opened down 12%, FTSE 2% on fears of economic slowdown, I’m asking all my clients whether they’re happy with their exposure.
With market sentiment changing and a potential increase to Capital Gains Tax, if you’ve been thinking about diversifying your company shares or have been thinking about talking to an advisor, I’d be happy to show you what we’re doing here at Humboldt.
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