Last week I talked about the perfect tax planning storm and opportunities emerging from these highly favourable conditions:
l Uncertainty surrounding (and discomfort resulting from) general anti abuse rules.
l The fact that one in 10 Britons risk falling into a higher tax bracket as a result of poorly planned inheritances (data from ONS has revealed)
l The growing need to demonstrate the value of advice (above and beyond investment performance)
l The world’s increasing demand for instant gratification
Picking up the last point, The Pew Research Centre has described the dangers of hyper-connected lives with what sounds like a prescription drug warning: “Negative effects include a need for instant gratification and loss of patience” – two side-effects of parenthood I can recently testify to. Noah’s needs are instant and go from 0-60 faster than most fast things.
And my patience, I’m sorry to admit, can go walkies just as quickly. Drivers whose vehicles have not been fitted with on-board motionlessness detectors (aka babies) and linger more than a second at traffic lights, once green lit, have fallen victim to the odd ill-advised diatribe of late.
Though in truth, the only real victim is me – holding on to anger being rather like grasping a hot coal with the intent of throwing it at someone else. But, as Mark Twain said: “When angry, count four. When very angry, swear.”
Nearly half of advisers are working with other professionals in implementing tax solutions, recognising the limitations of their own knowledge and, perhaps more importantly, the dangers and cost involved in getting it wrong in the more contentious areas of tax planning.
But in this environment over 70 per cent of advisers also attribute value to provider-led tax planning ideas as a means of business generation.
Clients’ desire to reduce IHT but retain control over and/or access to investments represents the biggest business generation opportunity according to advisers (53 per cent rated it as a strong opportunity), closely followed by the freezing of the IHT nil rate band (36 per cent). The impact on income tax (20 per cent) and CGT (11 per cent) are seen as presenting less of a clear opportunity for engagement.
So opportunities abound for both advisers and providers, but only a small proportion seems set to take advantage (good news for the few who are) – our recent research reveals that those already considering (and implementing) tax minimisation as a core part of their business are far more likely to see it becoming more integral when compared to those advisers who are less engaged.