Jeremy Corbyn’s tax proposals “threaten to rip up the rule book on legacy planning”, a Chartered Financial Planner claims.

Rachael Griffin TEP FPFS, head of trusts & technical solutions at Old Mutual Wealth, outlined concerns after Labour’s manifesto was released yesterday.

She said: “There will be concerns that in attempting to improve efficiency and fairness in tax policy, policymakers re-invent the system with unintended consequences. These proposals threaten to rip up the rule book on legacy planning.”

The pledges included proposals to review trusts and introduce a public register of trust assets and beneficiaries. It covered tax on property held in overseas trusts.

The manifesto stated: “Trusts are a key vehicle for tax avoidance and illicit financial flows. Labour will create a public register of all trusts showing their assets and beneficiaries. We will look particularly at trusts which transfer the residence of their trustees o shore, and those tax avoidance schemes involving trusts which are disclosed to the HMRC under the current law.”

Ms Griffin said: “The policy costings document outlines a proposal to review tax reliefs and the use of trust structures for tax planning purposes. Trusts are a long-established mechanism for legitimate inheritance tax planning and they are an effective mechanism for maintaining control over your affairs in later life and when you eventually pass.

“Privacy is very important to people, not because of money laundering or tax avoidance, but often as a result of complex family situations. So the proposals for a public register of trust assets and beneficiaries will also concern some people. Many people want to be able to provide for loved ones on death, without the emotional upset, which could arise if the arrangement is made public. It could also put beneficiaries in a vulnerable position, where their future inheritance is made public.”

Labour also pledged to re-introduce the 50p rate of tax on the highest earners (above £123,000) and have an income tax rate of 45p on £80,000 and above.

More free childcare, expanding free provisions for two, three and four year olds and a guaranteed triple lock for pensioner incomes was also in the manifesto.

Chris Daems DipPFS, director of Cervello Financial Planning, told FP Today: “The Labour manifesto is certainly an interesting one. I see the appeal of retaining the pensions triple lock and helping families with childcare.

“I'm also broadly comfortable with individuals who earn more paying more tax. However the thresholds are set at income levels and rates which will impact people who are potentially doing 'well' but don't consider themselves 'wealthy' especially in London and the south east which might impact the effectiveness of the manifesto in certain parts of the country.”

Richard Parkin, head of pensions policy at Fidelity International, said: “What is not in Labour’s manifesto is more surprising than what’s included when it comes to pensions. I’m surprised that there has been no reference to tax-relief reform and, in particular, a shift to a more redistributive policy here.

“Nor is there any mention of any rethink on pension freedom which they have expressed concern about in the past. In fact the manifesto is silent on if and how private pensions would be reformed at all beyond yet another swipe at hidden rip-off fees and charges.”

Tom Selby, senior analyst at AJ Bell, said the Labour guarantee for a state pension ‘triple lock’ throughout the next Parliament is an “attempt to put clear blue water between Labour and the Conservatives”.

He said that “many will question the logic of providing such a guarantee given that the incomes of workers have flat lined in recent years” and described the triple-lock as a “fairly random mechanism by which to increase state pension payments”.

A proud day for us in @UKLabour: our Manifesto has just been released. #ForTheMany. Read it, discuss it, share it: https://t.co/nXm01GIrNd pic.twitter.com/wTIZBfpwBe

— Jeremy Corbyn (@jeremycorbyn) May 16, 2017