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Discover how to protect your wealth

PUBLISHED: 14:33 25 September 2017 | UPDATED: 14:33 25 September 2017


Simon Lewis, CEO at Partridge Muir & Warren, gives tips on protecting your wealth.

Grow and protect your wealth

Making never been more challenging. As we see it, you your wealth work effectively for you has are under siege from a number of directions. Firstly, it is an inescapable fact that tax revenues will need to rise as the population becomes older. The tax burden on those of modest wealth has increased substantially during the last 10 years and it seems likely that this will be a continuing trend. If your financial means are greater than the UK average, it might be worth remembering Benjamin Franklin’s quote that: “democracy is like two wolves and a lamb deciding what’s for dinner.”

Of course, if a society is to work effectively, everyone should pay their fair share. However, political expediency often trumps fairness when it comes to the priorities of Parliament, so if you do not want your hard earned wealth dished up for the benefit of others, it makes sense to take advantage of legitimate measures to prevent you from being exploited by the less fair aspects of the UK tax system.

There are many opportunities to optimise the tax efficiency of your financial plan and these extend to the use of investments and pensions as well as wills and trusts; so there are actions for everyone to consider. I have provided a modest selection of alternatives to get you thinking about what you need to do.


Recent years have seen a considerable relaxation of the rules that govern the accessibility of pension funds, yet tax relief on contributions remains available at the pension holder’s highest marginal income tax rate. Paying into a pension is a more compelling proposition than ever before, particularly for higher and additional rate taxpayers. However, the new rules also mean that you cannot have ‘too much of a good thing’ so it is important to plan not to exceed either the annual allowance or lifetime allowance, both of which act to restrict the benefit of tax relief for high earners and those with substantial pension pots.

Individual Savings Accounts (ISAs)

It is now possible to invest up to £20,000 each tax year in an ISA. Some people say that the tax benefit is marginal but when you look at the big picture, the tax benefit can be substantial. For example, we now have many clients who have accumulated ISA funds of over £1 million, simply by taking advantage of their annual allowance every year and investing the money wisely under our guidance. The benefit of having saved in ISAs (and their predecessor, PEPs) over such a long period is that some clients are saving up to £20,000 a year in income and capital gains tax compared with having saved in the same investments, but outside an ISA.

Wills, trusts and estate planning

As if we don’t pay enough tax during our lifetime, HMRC has a final bite of our financial cherry when we die. With very few exemptions, inheritance tax (IHT) will consume 40% of the value of an estate in excess of the nil rate band (currently £325,000). Yet this tax liability can be reduced by many methods; for example gifting before death, sheltering money in trusts and pension funds, making charitable bequests and utilising business property relief. It might even be sensible to simply increase your spending.

We are currently using a number of noncontentious schemes that are capable of generating substantial IHT savings.

Modify your investment strategy

Although tax planning is important, tax efficiency is less beneficial if the underlying investment return is poor. You might have enjoyed good investment returns in recent years, but much of this has probably been driven by quantitative easing (QE): the widely adopted Central Bank policy of creating new money with which to infuse the financial system. There will be some painful withdrawal symptoms for financial markets during the unwinding of QE and it is important that you position your existing investments so that your previous gains are not lost.

The first rule of successful long term investment is not to assume that history will repeat itself. The tools used by most financial advisers and investment managers to help them invest their clients’ capital are backward looking by nature. In other words, they prioritise the selection of investments that have already done well and relegate those that have performed poorly. This increases the risk of buying investments when they are over-priced. A good investment becomes a bad one when you pay too much for it.

Get some advice

To find out more about how you could structure your financial strategy please come and talk to us. We offer a complimentary, no obligation initial consultation. It is unusual for us not to be able to find at least one thing that you can do to improve your situation, so you have nothing to lose and something to gain. 



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