How the UK Budget 2024 Impacts Inheritance and Capital Gains Tax for High-Net-Worth Clients

The 2024 UK Budget introduces several critical changes to inheritance and capital gains tax that will affect high-net-worth individuals (HNWIs) and their estate planning strategies. The IHT threshold freeze remains in effect, meaning that while the threshold hasn’t increased, asset values are likely to rise, indirectly increasing the IHT burden on estates over time. This can especially impact clients with high-value assets, such as property portfolios or significant business interests. The continued freeze makes it essential for HNWIs to regularly review and adjust estate plans to avoid unexpectedly high tax liabilities for their beneficiaries.

For those managing cross-border wealth, the budget has also introduced heightened compliance measures and more rigorous reporting requirements, particularly for non-domiciled residents. As these reporting requirements evolve, clients with global assets will need to ensure their estates are structured to maximise tax efficiency across multiple jurisdictions. Establishing trusts, gifts, and charitable donations are options that could be strategically employed to mitigate the rising IHT burden, allowing clients to leverage potential tax reliefs for qualifying contributions.

The changes to capital gains tax (CGT) will affect property owners, investors, and anyone planning to sell high-value assets in the near term. By maintaining the CGT thresholds without adjustment, the budget places a greater tax burden on those seeking liquidity from assets. With property values expected to appreciate further, property owners may face higher CGT on sales, potentially impacting investment strategies for landlords and real estate investors.

Why GSC Can Help:
The intricacies of the IHT and CGT changes require a thorough review of each client’s financial landscape. Our team at GSC Solicitors specialises in high-net-worth tax planning, estate structuring, and international compliance, ensuring that clients not only remain compliant but also make informed decisions to protect their legacy and optimise tax efficiency. Contact our Private Client team for a bespoke consultation on your estate planning and wealth management needs.