People Rebecca Stamford-Pyle Gillian Barrow

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Asset Protection & Wealth Preservation

The creation and retention of wealth are aspects of our lives that are important to us all.

Protection from taxation of this wealth is equally important, in particular from Inheritance Tax, once the so called ‘rich man's dilemma' but increasingly applicable to many of us.

Wealth also needs to be protected from as yet un-contemplated or unforeseen dangers, which may lead to the persons you choose to inherit your wealth being unable, unwilling or insufficiently responsible to look after monies themselves. You may wish to preserve some of your wealth for future, unborn generations, or even those you may feel at risk of divorce.

To protect and preserve wealth requires sensible and simple planning. Three practical courses of action which can be taken to effect both protection and preservation are to:

• Ensure your financial affairs are clearly and concisely dealt with under your Will. This should smooth the way for the efficient transfer of your estate upon your death, whilst paying the least amount of tax, using trust funds where necessary;
• Effect the transfer of your assets now through the use of Lifetime Gifts;
• Arrange for the creation of a tax-efficient fund to allow the beneficiaries and/or executors of your estate to meet any tax liability.

The above three solutions will allow you to be realistic and will provide flexibility whilst keeping matters as simple as possible.

Bespoke, Individual and Specialist

We employ various methods that, in conjunction with other specialist professionals, allow us to advise, arrange and assist with all aspects of asset protection.

Solutions involve the reduction (or where possible, the total eradication) of any tax liabilities that may be incurred by your executors, trustees and/or beneficiaries.

We can provide strategic tax-efficient solutions for couples or individuals. To take advantage of these solutions you will need a financial assessment, and if you decide to proceed, we will be able to produce the necessary legal documentation using wills and trusts, where appropriate. It is also important to remember that the some of the following solutions can be completed within two years of death if necessary, to avoid an unwanted tax liability.

  Asset Protection Solutions

1. Asset Protection Plan (APP)

Enables married couples or civil partners to utilise both their nil-rate allowances by way of Discretionary Will Trusts and as a result avoid or reduce the impact of Inheritance Tax. These plans allow greater flexibility, whilst addressing important practical issues.

2. Variable Trusts

This type of trust is used in combination with life assurance plans, and to a lesser extent, investment bonds. As with all our discretionary trusts, the trustees can decide when, if and which of the named beneficiaries should receive benefits from the trust, and in what form – income or capital.

3. Absolute Trusts

The Absolute Trust is designed for people who have a certain beneficiary in mind. The most common example of this is a grandparent wishing to make a gift to a grandchild. Using this form of trust enables the child to make use of their income tax allowance and also their CGT allowance if appropriate and necessary.

4. Lifetime Gifts

Individuals have an annual ‘gift' allowance of £3,000 (exempt from any IHT liability). This can be to help maintain dependents or donated to charities, however this solution alone is limited in protecting assets for use by future generations. It is an option to consider, in conjunction with any of our other solutions.

5. Property Investment Plan

If you are considering purchasing a second property, it is possible, depending on a number of factors, to structure that purchase so as to make the most of tax planning opportunities.

6. Assured Sum Plan

Making gifts might not be a means of protecting assets favoured by some people. Any hesitancy might be based on the future holding unknown changes of fortune, such as the need to receive an income, or to meet unforeseen expenditure.

An older form of asset protection is to provide a fund to cover the anticipated IHT liability by effecting a life assurance plan written into a form of an Absolute Trust.

7. Exempt Investment Options

Another option to consider is the benefit that can be provided by shares listed on the Alternative Investment Market (AIM).

For further information about any of the above asset protection solutions or to arrange an informal meeting to discuss your situation, please contact:

Rebecca Stamford-Pyle

t : 0113 3460051

e : assetprotection@foxhayes.co.uk