Call us now 

0344 967 0793

Related Services

Tax & Trust Planning

From the start of a new decade just a few months ago, no one could have imagined how extraordinarily our lives would change. Things may never quite be the same again but life will go on.

I have been reading some articles in the mainstream press referring to the possibility of an economic ‘Depression’. I say they are scaremongers and doomsayers. Yes, the world economy will most likely tip into recession and yes, increased government borrowing will need to be paid for, but this is not the 1920’s or 30’s. Our society and Government is simply not the same as it was then. The economy, both domestic and global, is not the same either.

Every Financial Advisor and Wealth Manager I know reiterates the message that investments should be viewed over the long term.

Investment portfolios may have taken an immediate shock and fall in value and maybe property values will also dip slightly, but they will recover, they always do.

In the meantime however, the fall in asset values presents certain estate and tax planning opportunities.

Capital Gains Tax

The crystallisation of losses in assets isn’t necessarily the end of the world. If you have some assets standing at a significant capital gain, property perhaps, and other investments, stock and shares, standing at a loss, the crystallisation of those gains and losses in the same tax year can be offset against each other for CGT purposes. If crystallised losses exceed gains in a tax year, those losses can be carried forward for use in future tax years. To properly crystallise gains and losses however, just be sure not to reinvest in the same assets or holdings within 30 days. Always take the advice of a financial advisor, stockbroker or wealth manager before making investment decisions.

Inheritance Tax

Alternatively, if you were thinking about making gifts for IHT purposes to reduce the value of your estate, now may be a good time to make such gifts where values are, perhaps, slightly depressed at this time. If you don’t want to make outright gifts, perhaps you might consider making gifts to a trust. A person is generally limited to how much they can give to a trust, £325,000. With lower values however, there is the opportunity to get more assets into a trust while waiting for the market to return.

You should always take financial and tax advice from qualified professionals before selling or gifting assets.

Kurt Lee is a Solicitor and Chartered Tax Advisor who specialises in capital gains tax, inheritance tax and trust planning.

If you would like more information, please contact our tax and trusts solicitors by emailing or calling 01202 702630.