The cashflow projections include a number of assumptions and current calculation simplifications. These include the following:
- All Actions (excluding the repay a debt action) are executed at the start of the reporting year in which the date entered falls – this applies to actions (Sell a Property, Buy an Annuity, take PCLS and Invest a Windfall) for both main life and 2nd.
- The calculation of the outstanding loan amount for a debt assumes that all prior debt repayments have been fully paid, even in periods where there is a shortfall in income to meet them.
- Tax Calculations in each reporting year use the tax rates and bands applicable at the start of that reporting year, there is no pro-rating for cross-over of tax years.
- Capital Gains are taxed assuming that clients are higher rate tax payers.
- Net of Tax income calculations for Scottish Tax Residency assume that the upper and lower limits of the basic rate tax band (20%) remain fixed until 2025/26, in line with all other tax bands remaining fixed during this time.
- The £2,000 annual dividend allowance is assumed to be fixed until 2025/26 and to increase each year thereafter at CPI.
- The increase in the NI threshold to £12,570 has taken effect immediately for tax calculations.