And the Budget changes most feared by FT readers are . . . 

At the FT Weekend Festival last Saturday I had the pleasure of mingling with hundreds of FT readers blessed with the broadest shoulders, financially speaking, who are firmly braced for the impact of tax rises.

Held in the grounds of Kenwood House in London, storm clouds lingered threateningly over the FT Money tent all afternoon. We were mercifully spared a drenching, but the discussion inside rarely strayed from fears that the upcoming Budget will soak the rich.

So what do our readers and expert panellists anticipate will happen, and more importantly, what are they all doing about it?

With more than 250 readers packed into our Budget predictions session, our smartphone poll identified changes to capital gains tax, inheritance tax and pensions tax relief as the top three Budget day fears. Roughly two-thirds of the audience said they had made or were thinking about making financial decisions as a direct result of feared tax changes; many with an intergenerational angle as the great wealth transfer gathers pace.

With so many different potential tax rises being speculated, the panel felt the likelihood of the chancellor pushing through all of them was low. Jim Pickard, the FT’s deputy political editor, got everyone’s heads nodding with his prediction that tax changes were going to be crafty.

“If it’s complicated, it’s attractive,” was his verdict. Better to fiddle around with tax allowances that few, apart from the wealthiest voters, will understand or care about rather than risk another winter fuel-style rebellion.

In this respect, raising capital gains tax rates ticks all the boxes. In the Q&A, many readers said they were selling shares held outside pensions and Isas; a widely documented trend in recent months. However, those who were selling were not just taking a punt on higher tax rates in future — they’re also taking profits at what many believe is the top of the market.

Earlier in the day, when fellow FT columnist Stuart Kirk asked readers in the Money tent to raise their hands if they expected equity markets to keep on rising for the next five years, barely more than 10 people did so (“A strong buy signal if ever I saw one,” was his riposte).

Regardless of what’s spooked readers into selling up, the question is then what will they do with the money? Rebasing, waiting for the appropriate period and reinvesting the money is one option; giving it away is another.

Changes to inheritance tax was number two on the Budget worry list, reflecting the demography in the Money tent (most of our audience were over 50). Advisers on the panel concurred that a life-threatening pandemic followed by a wealth-threatening Budget had focused minds, with clients updating wills and making lifetime gifts sooner rather than later to start the “seven-year clock” ticking.

Panellist Nimesh Shah, chief executive of tax adviser Blick Rothenberg, speculated that stretching this out to a 10 or 12 year timeline before gifts pass free of IHT, or introducing a US-style lifetime gifting allowance were two “complicated” tweaks the chancellor could be tempted by.

Naturally, readers who had already started the gifting process feared retrospective changes. Shah felt this was unlikely, noting this would go against one of the key pillars of the UK tax framework, but urged readers to “document everything”. In our separate IHT seminar, taking out life insurance to help heirs cover tax bills emerged as a popular strategy.

Those who had already accumulated pensions wealth were more concerned about losing the IHT advantages, and less concerned about a flat-rate of pensions tax relief. However, younger generations actively building up their retirement pots were shovelling money away. Shah advises businesses that report higher-paid workers are keen to make extra pension contributions via salary sacrifice long before Halloween. Eek!

Although plenty feared losing it, few readers said Budget fears had prompted them to take their tax-free pension cash. Panellist Katherine Waller, co-founder of wealth manager Six Degrees, explained that by taking a lump sum out of a pension and reinvesting the proceeds they risked being taxed more on future growth, especially if CGT rates rose: “If you don’t need the money now, better to leave it to grow and compound in a more tax-efficient environment.”

The panel’s feeling was that Labour would meddle with lump sums at their peril — they’re one of most widely understood benefits of pension saving. Higher rate tax relief felt more “complicated” and thus endangered — but this wasn’t the only issue our audience felt strongly about.

The fear factor of how high CGT rates could go is prompting older business owners to consider selling up and shipping out (both Shah and Waller advise plenty of entrepreneurs who are weighing this decision). The panel also urged the chancellor to consider the impact on future generations of entrepreneurs. If we don’t reward those prepared to risk their capital and start a business, why leave your well-paid corporate job?

This got a lot of nods from the audience, many of whom invest in UK growth companies using tax-advantaged EIS and VCT structures. There are no rumours (yet) that these allowances are under threat, but getting rid of business property relief on Aim-traded shares is a move that would definitely fall into the “complicated and attractive” category.

The intergenerational dimension of our audience was striking, with many readers attending alongside their adult children as they prepared to pass on the family’s financial reins. If you can take such an open approach in your family, congratulations. However, private conversations with readers on the sidelines provided insights into a related fear — whether you trust your children enough to hand over financial control earlier than you’d like to avoid higher tax bills. A rich person’s problem if ever I heard one!

As for the Budget, I am certainly not expecting any tax giveaways to be pulled out of the chancellor’s hat. However, I am clinging on to the faint possibility that the biggest surprise on the day could be that whatever tax rises end up being announced are not quite as bad as we feared. Here’s hoping.

Claer Barrett is the FT’s consumer editor and the author of ‘What They Don’t Teach You About Money’. claer.barrett@ft.com Instagram @Claerb

You can buy a video on demand pass to watch all of the FT Weekend Festival sessions on catch-up for £85, including FT Money’s Budget panel, the inheritance tax planning seminar and Claer’s interview with Skin in the Game columnist Stuart Kirk. Visit FT.com/festival for full details.