There are several reasons why this may come to mind at this time.
- Constant daily news about thousands of deaths does tend to focus the mind on our own mortality.
- The gifting (rather than sale) of an asset can still lead to a Capital Gains Tax liability, even if no payment is received in exchange. However, the recent fall in asset values could reduce/remove any such tax liability.
- The government support package for companies and individuals clearly has significant cost. A large amount will be funded by increased debt, but there is still wide expectation that some tax increases will be required. Inheritance Tax is one that could be on the government's radar, with the potential for the reduction of allowances and/or an increase in the percentage tax rate.
- Everyone has their own issues and difficulties in dealing with the current restrictions to our social and physical life. However, the economic impact of the loss of income and financial security has and will fall most heavily on those of working age, and particularly younger workers (Resolution Foundation).
Most of us, via our Wills, have a plan for how our remaining assets should be dealt with on death. But "it is better to give than to receive", and a corollary of this is that it is better to be present to see the benefit and help that a gift can give, rather than for it to happen via your Will and estate.
As financial planners, our number one priority is our clients' financial security, and the long term sustainability of this. However, for those with the good fortune of having excess financial security then the conclusion may be that now is the time to make relevant gifts, both from a personal perspective (in terms of tax efficiency), but also in terms of giving at a time when the benefit to younger family members is maximised.
If this applies to you, then we can help with the subsequent questions:
- How much can you give away and remain financially secure?
- Which assets to use?
- What could be the potential tax benefit to your estate?
- What combination of direct gift, loan, and/or Trust best suits your unique situation?
- What are the risks involved?
- Is there anything the recipient should do to optimise their position?
If you'd like to talk to us about this then please get in touch for a no-charge initial call (phone or video).