Irrespective of political views, most people agree that we are living in uncertain and changing times. Might immigration rights change? Will we see changes to the rates of personal and business taxes? Or the introduction of new taxes? Will pensions, trusts, businesses and investments be affected? Might capital restrictions be introduced to prevent money from leaving the country in an attempt to stop a currency collapse?
This can be unsettling, especially for anyone who has taken the time to carefully plan their affairs, but by making the most of the current regime and planning ahead, a great deal of comfort can be achieved.
Capital gains tax is historically low at the moment (10%, 20%, 18% or 28%) which provides an opportunity for realising gains at a favourable tax rate. Similarly, certainty can be achieved on the rates of tax that will apply to income realised now.
The Government are currently consulting on inheritance tax (“IHT”) and the reliefs available. For now, the “seven year rule” provides the potential for gifts to be made to anyone free of IHT, and IHT “Business Property Relief ” (discussed previously in Andrew McIntyre’s article) is available for trading businesses, unquoted shares and certain quoted shares. Might it be a good time to pass business assets down to the next generation or to involve them in the family business?
Some are considering relocating and leaving the UK tax net altogether. There are some attractive alternative jurisdictions, especially for those who are able to invest locally. For others, it might be a case of relocating investments, businesses and trust structures.
It is always prudent to regularly review any arrangements in place and to utilise reliefs that are available. Doing so with an eye to the future continues to be the best way to achieve a degree of certainty and comfort in these uncertain times.