Tax changes will focus attention on how to adapt financial plans

First published in The Business.

This year, the Autumn Budget has attracted even more interest and attention than usual.

At the time of writing, it is yet to come, but as you read this article now the Chancellor’s intentions are known. So the writer is faced with either predicting the budget or penning some thoughts that will apply both before and afterwards.

As predicting the future is both difficult and risky, especially when talking to people who already know whether you were right or not, the latter option is far preferable. It requires no predictive powers to say that many people in the UK will face a larger tax burden in future. This will focus people’s attention on how to adapt their plans accordingly; professional advice may be of use here.

One of the most common ways to pass wealth between generations has been to make significant gifts of assets, as these fall outside Inheritance Tax if made at least seven years before the donor’s death. Often, however, little thought can be given to ensuring that the recipient of such gifts puts a valid will in place. Recent surveys suggest that around half of all adults in the UK do not have a will in place. And we can be sure that in some of the other cases the will no longer reflects the person’s wishes, or is in fact not legally valid. A significant increase in someone’s wealth should always be a trigger to write a will or review an existing one.

And anyone in this fortunate situation would also be well advised to have a Power of Attorney in place, so that others can step into their shoes and manage the assets if required. There are several important choices to make here, such as exactly what powers to grant, who to grant them to, and whether those people can act individually or must agree. These should all be carefully considered before a decision is made.

As autumn turns to winter, the darker, colder nights are the perfect time to dust off your legal documents and ensure that they are up to date.

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