Guides & Advice

Protecting your wealth
in a period of uncertainty

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Protecting your wealth in a period of uncertainty

Published: 26th March 2020
Area: For the individual
Author(s): Anne Tromans ,

As you spend more time at home with your loved ones, it’s understandable that your thoughts may turn to the best way of protecting your estate to pass onto your friends and family.

How can I protect my assets?

Wills clearly have an important role in estate planning on death, but often the best inheritance tax planning opportunities are those effected during one’s lifetime.

Whilst stock markets are tumbling, property prices falling and businesses of all sizes are facing uncertain futures, it’s reasonable for people to sit tight and be hesitant to part with their wealth. However, ironically, some of the best tax saving opportunities can be found and achieved in a falling market.

So how can I reduce my tax liabilities?

Capital gains tax (CGT) often prohibits the direct gifting of assets to individuals.  However, if the value of an asset decreases in a falling market, then so does the impact of capital gains tax on the gift – this is because the tax is based on the gain that’s been made on that asset, and not on the value received. This is often overlooked by individuals, who only recognise the potential implications for inheritance tax and not those for capital gains tax.

Gifting assets into a certain trust can potentially mitigate an immediate charge to CGT on the person making the gift, deferring it into the hands of the trustees of the trust, often giving them time to plan/minimise the future crystallisation of such a gain.

A decrease in the value of assets could also mean that more assets can be placed into a trust before any inheritance tax is triggered – so a double tax-saving opportunity.

We understand it’s a difficult time

We know that looking after the wealth you have accumulated during your life really matters, so we want to help you and your family to make the most of it. Whilst it’s currently a time of uncertainty for many, there are plenty of opportunities out there for effective wealth planning that will make a real difference,

Contact a member of your local private client team to help guide you through the process.

For advice or guidance on any other legal issue, a member of our team can help – please click here to discuss.

For more general advice in relation to coronavirus visit our dedicated resource hub.

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