Last Tuesday 20 October, 70+ participants followed our webinar focusing on the UK budget delay and the subsequent adjustments that advisers to High Net Worth individuals and their families may consider for their clients’ wealth and estate planning strategies.


Hosted by Chris Edward, our UK & South Africa Country Manager, this webinar showcased an expert discussion between John Barnett, Partner at Burges Salmon, Chair of CIOT’s main Technical Policy and Oversight Committee and member of the CIOT governing Council; and Simon Gorbutt, Director of Wealth Structuring Solutions at Lombard International Assurance and Chair of STEP Benelux.



The Budget, due to include an important 4-year comprehensive spending review, was planned to be held this autumn, to give businesses, individuals and the administration time to implement important changes to tax and spending policies before the financial year-end. However, the pandemic has forced its delay.

The postponement might leave little time to adjust and with the current level of government spending, next year’s budget could be substantial, with potentially major tax changes being announced for UK taxpayers.


CGT, IHT, Wealth Tax… Should we expect some substantial changes in the existing tax framework in the UK?


For sure, tax is not going to go down” said John Barnett. In this regard, the speakers exchanged views on whether this a good opportunity for advisers to look at their clients’ unrealised capital gains to potentially realise them at current rates before the new Budget comes into force, in order to avoid any surprises. More broadly speaking, “it is their clients’ current wealth and estate planning strategy that advisers should evaluate, to make sure they have the right structure in place” added Simon Gorbutt. “We have seen an acceleration in HNW client planning over the past months, as the pandemic has raised awareness on the importance of foresight to weather uncertainty”. However, although this may have resulted in more donations, there is a question mark over whether significant changes are to be expected in the short term on the IHT, which is a very “sensitive topic that most politicians will stay away from” stressed John.

On the topic of a potential wealth tax, and whether it could be a one off or more lasting one, Simon and John agreed that although it might look like a good idea on paper, it is not simple to implement and that the expected outcomes are not always as straightforward as they might sound. “We already have a wealth tax in the UK, and it is called IHT” said John. Another question posed was which assets do you put under the wealth tax? The Financial Times recently ran a survey with their readers of which half said they would support a wealth tax and 45% of readers opposed the tax. They also include an Ipsos Mori survey released last week which found that 75 per cent of people backed a levy on assets — with the most popular starting threshold given as £500,000[1]. “It is not surprising to see that some may find it fair, but others will argue that they are getting taxed twice. Other problems include how to value the assets? It is a tricky tax to design and most European countries have moved away from it” argued Simon. “Although it may well be the right tax to raise enough money to pay back the increasing pile of debt, most economists agree on the fact that it does not make economic sense. It is a tax that is expensive to raise” added John.

Which wealth planning structures should advisers consider for their clients in the current situation?


Simon and John described the different options available in terms of wealth and succession planning for wealthy clients. They identified Trust and insurance-based solutions as being particularly relevant in the current environment. “Wealth planning strategies and the relevant structure to use should be adjusted according to the client’s individual situation. Non-UK residents, RNDs and deemed domiciliaries and domiciled individuals have different needs” outlined Simon.

Whilst Trust-based solutions are common structures in the UK, they can become less powerful when it comes to international portability. “Some countries such as Germany may consider a Trust as being transparent while others like Sweden may not but might tax distributions heavily” explain Simon. “Insurance-based wealth solutions remain among the most portable options for transfer of residence.

Is there a tendency to combine both structures? Indeed, “it does not have to be one or the other. Combining Trusts with insurance-based wealth planning solutions can be very powerful” argued Simon. “People need to move away from considering these solutions as just wrappers. They are very meaningful in terms of wealth and estate planning. They allow for greater sophistication and bespoke solutions to complex needs” added John. “Insurance solutions ought to be more popular than they are, particularly for RNDs.”

You can listen back to the full webinar by playing the podcast below:


Note: The views expressed by John Barnett are his own and not necessarily those of Burges Salmon LLP or of the Chartered Institute of Taxation

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