In structuring our financial plan, we factor in succession planning for our clients who have children and /or grandchildren back in the UK or elsewhere, and this may necessitate careful wording in the clients letter of wishes to ensure that assets pass onto future heirs in the quickest and most tax efficient manner.
Given the outcome of the 2024 UK budget, it is of particular important to re-locate UK situs assets as a non-resident, to an alternative tax jurisdiction. Post UK Budget, there is an opportunity for UK long term residents (LTR) to disinvest their UK assets and contribute them to an International Retirement Plan if they are non-UK LTR, and when they pass away, we can create an offshore trust if they have UK beneficiaries. This will be both beneficial from an income tax and inheritance tax perspective for the beneficiaries in the UK.
To add on the opportunity for UK expats, an Offshore Trust could be created for UK resident beneficiaries, and this will not incur the periodic charges, if the client that passed away was non-LTR (out of the UK for consecutive 10 tax years). This would mean that UK Inheritance tax would not be paid by children in the UK.
The International Retirement Plan that will be settled into the trust will then be regarded as excluded property in the hands of beneficiaries. (excluded property is property situated outside the UK, that is owned by trustees and settled by someone who was permanently living outside the UK at the time of making the settlement) i.e. Portugal / Spain. Specialist advice is required in this regard and that is how we can assist at St James Global Private Clients.
