Alasdair Kyle: Now is a good time to adjust any future financial planning

Due to the current political uncertainty and a slowdown in global growth, it may not feel like the most appropriate time to think about your future financial wellbeing. Arguably, however, this is probably the most appropriate time to get your finances in order.

Alasdair Kyle is a Portfolio Manager in the Discretionary Portfolio Management Team at Thorntons Investments

Speaking to a financial adviser is a key first step towards taking control of your finances and allowing you to adjust your future planning to the impact of external economic forces, both positive and negative, as they emerge around us. This simple activity can provide a strategy towards achieving your current and future financial goals, aiming to provide you with some financial peace of mind and clarity on what we expect the next ten years may look like, when the current political and economic issues have (hopefully) been long forgotten.

To help explore the question of retirement and estate planning, Thorntons Investments, in conjunction with our colleagues at Thorntons Law, are holding an informal breakfast seminar at the St Andrews Golf Museum on the 25 February from 8:30 to 10:30, at which we will look at some of the tax planning opportunities available along with legal considerations around the use of Wills for estate planning.

Paying taxes is unfortunately a fact of life and nearly all of them come before death, the exception to the rulebeing Inheritance Tax (IHT). In the fiscal year 2018/19 HMRC collected £5.4 billion in Inheritance Tax, and this is predicted to rise to £6.9bn in 2023/24. There are a number of ways to reduce or eliminate Inheritance Tax, most of which are well used and have been in place for many years. ISAs for example are a popular savings vehicle for millions of investors with no tax payable on capital gains or on income, so these tax benefits are well known. Fewer investors, however, are aware that ISAs will fall into their estate on death and may be subject to IHT. Business Relief may offer a solution and, whilst it is one of the lesser-known estate planning solutions, its use is on the rise, particularly with investment in companies listed on the Alternative Investment Market

Investing in certain qualifying AIM shares offers you the prospect of obtaining IHT relief after only two years and if they are held at death, your executors can deduct their value when calculating any IHT liability. Unlike many other estate planning solutions, investing in AIM companies allows you to maintain access your capital, so should your circumstances change and you choose to sell some of the AIM shares held in your portfolio, this will not affect the potential IHT relief available on any remaining AIM shares held.

Investment in AIM company shares are considered higher risk, and there is no guarantee a stock will qualify for Business Relief at the date of death. Aside from the primary purpose of IHT planning, investing in AIM listed companies also offers the potential for significant investment growth over the longer-term.

We hope that you can join us for an informative and interactive presentation, where we will go into more detail on the why AIM may be a useful estate planning tool. You can also take advantage of this fantastic location and have a tour of the Museum at the end of the seminar.

To book your place, go to: Thorntons Investments Breakfast Seminar – St Andrews Golf Museum Tickets, Tue 25 Feb 2020 at 08:30 | Eventbrite

If you would like further information regarding this event, please do not hesitate to get in touch – [email protected] - or take a look at our website, https://thorntons-investments.co.uk/

Any information concerning the tax treatment of investments is based on our understanding of current Inland Revenue rules which may be subject to future change. Tax advice is not regulated by the Financial Conduct Authority.

Alasdair Kyle is a Portfolio Manager in the Discretionary Portfolio Management Team at Thorntons Investments