In light of budget tax investigation rumors, Aviva's chief advises against unnecessary customer actions
Aviva, the insurance, wealth, and retirement giant, has reported a 9% rise in sales to £21.5 billion, with profits soaring 22% to £1.1 billion in the first six months of the year. This positive performance has "lit up the path ahead" according to Susannah Streeter, head of money and markets at Hargreaves Lansdown.
Shares of Aviva rose 4% this morning after the update, reflecting the confidence in the company's prospects. The integration of Direct Line into Aviva, following Aviva's takeover of Direct Line for £3.7bn, is "well underway". The combined Aviva and Direct Line business is now a UK market leader with over 21 million customers, or 4 in 10 adults.
As a gesture to celebrate the 'milestone' deal, all Aviva and Direct Line staff will receive £500 worth of free shares. The share price of Aviva has risen by 35% over the last year, compared to a gain of 10.7% for the wider FTSE 100.
Meanwhile, Chancellor Rachel Reeves is proposing significant changes to inheritance tax (IHT) gifting rules in the upcoming Autumn Budget. The key proposed changes include introducing a lifetime cap on tax-free gifts, extending the "7-year rule" exemption period, introducing real-time reporting of gifts, and preventing early pension withdrawals used for gifting to circumvent future combined inheritance and income tax rates.
These reforms aim to raise revenue without increasing income tax, National Insurance, or VAT, consistent with the government's election promises. These changes would represent the most significant tightening of individual inheritance tax rules in decades, potentially generating public backlash due to the sensitivity around IHT.
Individuals considering gifting to reduce their tax liability may wish to act promptly before new rules take effect. Current gifting exemptions include annual allowances, small gifts, wedding/civil partnership gifts, and regular gifts from surplus income.
In a separate development, Richard Hunter, head of markets at interactive investor, stated that Aviva is "going from strength to strength". Aviva has also hiked its half-year dividend by 10% to 13.1p.
Various investing platforms, such as AJ Bell, Hargreaves Lansdown, interactive investor, InvestEngine, and Trading 212, are available for users to learn more about Aviva's services and invest in the company. Affiliate links may be present in the article, which may earn This is Money a commission if a product is taken out.
- Aviva's ongoing business expansion, as demonstrated by the integration of Direct Line and the rise in its share price, indicates a strong focus on both personal-finance and business ventures.
- Chancellor Rachel Reeves' proposed changes to inheritance tax rules, including a lifetime cap on tax-free gifts and extending the exemption period, could impact the wealth management strategies of individuals, particularly those considering pension withdrawals for gifting.
- For those interested in investing in companies like Aviva, several platforms, such as AJ Bell, Hargreaves Lansdown, interactive investor, InvestEngine, and Trading 212, provide information and opportunities to invest, with This is Money potentially earning a commission through affiliate links.
