Families are rethinking how, when and why they pass wealth on, not just because of tax headlines, but because priorities, relationships and expectations are changing. In this interview, RSM UK Private Client Tax Partner Rachel de Souza shares with IFA Magazine’s Deputy Editor, Jenny Hunter, what she’s seeing on the ground. From the emotional side of succession and the fear of giving up control, to the challenges of planning and keeping conversations constructive.
When it comes to wealth, families and advisers alike are operating in one of the most uncertain and fast-moving planning environments seen in years. Conversations that were once avoided or postponed have quickly become unavoidable dinner-table topics, especially for those with even modest assets. From inheritance tax, cross-border estates and succession planning to family communication and emotional readiness, things are continuing to shift dramatically.
Shifting from avoidance to active engagement
One of the most notable changes Rachel has seen is that families are no longer quietly assuming things will sort themselves out. They are planning early and asking deeper questions. “In the last 12–18 months, there has been a big uptick in families really engaging with wealth transfer. Anybody with even a modest amount of wealth is really thinking about how inheritance tax will impact them, and therefore, whether they should be doing any planning.”
She explained that the old pattern was often much more relaxed. Many individuals relied on a basic will and little more. “Previously, families quite often buried their heads in the sand about it; they wouldn’t give a huge amount of thought to exactly how the assets were going to be distributed amongst the heirs on death.”
This shift has not appeared in a vacuum. Government announcements, media speculation, financial uncertainty and the feeling that change is near are clearly accelerating decisions. Estate planning has now stepped firmly into the present tense, not the future tense.
The risks of international planning
Increasingly, families have overseas property, internationally mobile children or global business interests. This adds layers of complexity that can escalate rapidly without early advice. Rachel explained that one of the most common misunderstandings is assuming that a UK Will alone is adequate. “Clients might have a UK Will, and generally, that UK Will should cover worldwide assets. They may find it better to have Wills in the relevant jurisdictions, to ensure that they’ve considered what the local laws and inheritance tax laws are.”
A major complication is the difference in inheritance laws across Europe and beyond. “In a number of European countries, there is a set portion of your wealth that has to be transferred to your spouse and/or your children. People having holiday homes in France can’t leave it just to a spouse or one child.”
Double taxation is also a real and often unexpected risk, especially because the UK has far fewer inheritance tax treaties than income tax or capital gains tax treaties. “For capital taxes, our network is far more limited, and we only have 10 treaties.”
Without specialist support, families can accidentally trigger tax in two countries with no offsetting relief available. This can lead to irreversible outcomes if not planned while the client is alive.
Balancing control, trust and family confidence
Money is never only about numbers. It is tied to emotion, legacy, identity, parenting and fear. Rachel explained that while families are increasingly ready to pass wealth forward, maintaining control remains one of the biggest psychological hurdles. “Parents are worried about giving up too much control over wealth to their children; it can really extend quite a way to when children are in their 50s, even.”
A popular planning option is the Family Investment Company (FIC), which allows parents to start inheritance tax mitigation while keeping decision-making authority. “We create two types of shares: one type gives rights to income and future growth in value, and the other type gives control over decisions but no financial benefit. The children receive the income-and-growth shares, while the parents keep the voting-only shares so they remain in control of how and when value is passed on.”
The structure has been investigated and accepted by HMRC, something that has boosted confidence. “HMRC concluded a long-running internal inquiry into the use of Family Investment Companies and found that there was no evidence they were being used for tax avoidance purposes.”
For some families, trusts or offshore bonds may also be appropriate, depending on the circumstances and the level of control, flexibility and governance required.
Encouraging constructive family conversations
Advisers often say technical planning is straightforward compared to family dynamics. Rachel agreed that listening, pacing, and managing expectations are essential. “It’s really important for the adviser to listen, as everyone will have different views, and the process takes time, because everybody needs time to think about it.”
Whether discussions should be held jointly or separately depends on personality, trust, communication style and the family’s emotional history. “In some cases, you might bring all the family together at once. In others, the family might benefit by having one-to-one conversations; in that way, they can speak freely.”
The adviser’s neutrality must be made clear if private conversations take place, so no participant fears judgment or betrayal.
Planning needs to start earlier than you think
Pensions, probate timelines, and new legislative changes mean families must start planning long before death occurs. Rachel referenced the forthcoming pension rule changes and the tax implications on decision-making speed: “You need to have these discussions with the family sooner rather than later. If you leave it until the death, when everybody is full of grief, you may not be able to make the best decision in the time available.”
Grief and deadlines rarely work well together, particularly with tax consequences attached.
Looking ahead…
With an unusually wide range of tax changes being speculated over the coming months and years, advisers are struggling to prioritise where to focus. “There are so many that it’s become difficult for advisers to say, where do we really think that axe is going to fall?”
Potential changes to income tax, NI, salary sacrifice and the seven-year gifting rule are among the areas worth monitoring. Rachel also confirmed she is seeing a rise in wealthy individuals choosing to leave the UK, including UK-born entrepreneurs heading for alternative destinations. “A lot of wealth is leaving the UK; the politicians say “the broadest shoulders have to shoulder more of the tax burden”. I’m afraid that is an incentive for people to leave.”
Final thoughts
Families are acting earlier, asking deeper questions and looking beyond their domestic borders. Advisers have an opportunity to step into a broader role that includes technical skill, emotional intelligence and global awareness. Structures such as Family Investment Companies, specialist cross-border advice and well-managed conversations are not new concepts but are still valuable tools available to advisers.
As Rachel’s final message implied, planning cannot wait for clarity, because clarity may not come any time soon.
About Rachel de Souza
Rachel de Souza is a private client tax partner at RSM UK. She has over 25 years’ experience in private client tax planning, advising on a wide range of issues including cross-border planning, offshore structures, international pension plans and wealth transfer/estate planning.
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