61% of High-Net-Worth Individuals plan to give away the majority of assets during their lifetime. Commenting on the speculation around reforms to the Inheritance Tax (IHT), Gianpaolo Mantini, Partner and Chartered Financial Planner at Saltus, said:
“Inheritance Tax does not currently apply to the vast majority of estates, and funds from the cost of removing it entirely could be put to better use in other ways to encourage increased savings and investment.
“Data from the latest Saltus Wealth Index found that 61% of High Net Worth Individuals – those with assets over £250,000 – already have or plan to give the majority of their assets away during their lifetime, making IHT largely irrelevant. There are already a range of measures available to those that IHT could apply to mitigate its impact, with 64% having given away or planning to give away gifts to friends and family out of excess income, 67% passing on their home, and 61% leaving money to charity. The research also found that estates in 63% of cases will pass to their spouse and so be exempt.
“While the principle of reducing the impact of IHT is one to be welcomed, in an economic environment where the Government faces tough choices on spending there are other tax-based measures that would have a greater impact in incentivising British people across a wide range of incomes to increase their savings, in turn supporting businesses and the long-term strength of the UK economy.”
British ISA must not disincentivise the diversification of personal investments
Commenting on the speculation around the creation of a ‘British ISA’, Gianpaolo Mantini, Partner and Chartered Financial Planner at Saltus, said:
“Any measures that encourage increased savings and investment by the British public should be welcomed, but it is critical that the Government considers any unintended consequences.
“If the current stocks and shares ISA regime was reformed to apply solely to UK companies this would have a detrimental impact on investors. A balanced and diversified approach is always the starting point of any investment strategy, and limiting how the ISA allowance can be used – be that geographically or otherwise – runs contrary to that basic principle and could have a significant negative impact on long-term savings.
“If, however, the Government is considering a wholly new ISA, with an increased overall limit or separate pot that would only apply to investment into UK companies, then this has merit. It would enable investors to continue a diversified approach while at the same time increase incentives to add to their overall annual investment in a way that benefits British companies.”
