Talking points

Financial planning in the current landscape

Martyn reviews the changing pension environments and outline the proposed changes to the taxation of non-domiciled UK residents.

10/10/2016

Martyn Thornhill

Martyn Thornhill

Wealth Planning Director

Most people would agree that the last few months have created deep feelings of uncertainty, and in politics and financial markets uncertainty does not make financial planning any easier. However, this should not negate the concept of following a sound financial plan. Although each person’s objectives will reflect their own personal situation, financial planning is intrinsically about dealing with those things that will occur: such as the need to cease work at some point, the need to protect against unforeseen events and, in the words of Benjamin Franklin, “the twin certainties of death and taxes”. In this article, we will cover a wide range of issues which have been affected (to varying degrees) by recent events.

Reviewing the changing pension environment

 

Pensions

Investment planning

Tax-reducing investments

Inheritance tax planning

Non-domiciliaries (non-doms)

Summary of the main non-dom changes

  • UK residential property held by non-doms via offshore structures, such as offshore companies, will be brought within the scope of UK IHT.
  • Non-doms who have been resident in the UK for 15 out of the last 20 tax years will be ‘deemed domiciled’ for general tax purposes with effect from 6th April 2017.
  • There will be CGT rebasing provisions to help transition non-doms into the new regime. Curiously this relief will only apply to those non-doms who become deemed domiciled in April 2017 and will not apply to those who be deemed domiciled in future years.
  • There will also be a one year window, starting next April, to enable non-doms to rearrange offshore portfolios and accounts in order to separate the original capital from any income or capital gains. These can therefore be reorganised into the most tax-efficient series of accounts. This will apply more widely not just to those who become deemed domiciled next April.
  • Non-doms who were born in the UK with a UK domicile of origin, who subsequently acquired an overseas domicile of choice, will not be able to maintain their non-UK domiciled status if they become a UK resident again, other than for a short period. The future tax treatment of benefits received from offshore trusts has been made clearer than it was when the proposed changes were announced last year.

Author

Martyn Thornhill

Martyn Thornhill

Wealth Planning Director

Martyn joined in 2001. He focuses on providing holistic wealth planning advice to clients and works alongside our Portfolio Managers. Prior to joining Cazenove, Martyn worked in banking for 13 years and then worked for 9 years in a City based role for a leading insurer. Martyn has a degree in European Studies from the University of Bradford. He is a Chartered Financial Planner. Martyn has 25 years' financial planning experience. 

Issued in the Channel Islands by Cazenove Capital which is part of the Schroders Group and is a trading name of Schroders (C.I.) Limited, licensed and regulated by the Guernsey Financial Services Commission for banking and investment business; and regulated by the Jersey Financial Services Commission. Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested. This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements. All data contained within this document is sourced from Cazenove Capital unless otherwise stated.

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Julian Winser

Julian Winser

Chief Executive Officer
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