Back to Insights- UK/USA tax & estate planning
- Wills & Succession Planning
Shorter Reads
Should I protect my finances ahead of US and UK elections?
Senior Associate Aidan Grant responds to the concern of a Financial Times’ reader about potential tax changes after the 2024 elections in the UK and US, given their dual residency and high-income status.
1 minute read
Published 31 January 2024
Authors
- Visit profile
Aidan Grant
Senior Associate
- Read more from Aidan
Key information
- Specialisms
- Private Wealth
“Are there any steps that we should take now to protect our assets? My wife and I both fall into the highest income tax band, and while this money is mostly earned in the UK, we own property in the US and have savings accounts and other investments there.”
Americans commonly seek estate planning guidance from US-based attorneys. While the resulting plans may be tax efficient in the US, there may be potential UK tax pitfalls.
Grant advises caution regarding possible double taxation, suggesting careful tax reporting to claim credits in both countries where possible. Simply paying taxes in both countries as they arise is often the best way to maximize credits and minimize future UK tax liabilities on remittances.
Potential tax changes in both countries could result in wealthy couples becoming exposed to higher levels of taxation upon their deaths. However, leaving wealth either outright or in an appropriate will trust for a surviving spouse’s benefit should remain excellent and highly tax-efficient planning that may outweigh the costs and inconvenience of US probate.
Grant also highlights the complexities that arise if one spouse becomes a significant shareholder in a UK business, as US tax and reporting requirements may apply. He suggests considering tax-efficient wills to defer UK inheritance tax and US estate tax until the surviving spouse’s death.
Grant advises against exceeding the UK inheritance tax allowance with lifetime trusts for UK-domiciled individuals, but suggests exploring options if one spouse is not UK-domiciled. He recommends considering whether to create a trust before the UK election to preserve tax efficiency over non-UK assets and, utilising the larger US estate tax allowance. However, he warns of the need for careful planning to avoid double taxation on the trust’s income and gains.
For more information, please visit our US/UK Tax Advice page and check out our UK/USA podcast series.
This article was first published by the Financial Times on 30 January 2024.
Related latest updates
PREV
NEXT
Longer Reads
Read more
Piggy Banks to Portfolios: can children hold shares in a company?
Shorter Reads
Read more
CB team comments on the Chancellor’s 2024 Spring BudgetShorter Reads
Read more
Why should families take heed of the Alain Delon inheritance dispute?
Longer Reads
Read more
The implications of inheritance taxLonger Reads
Read more
Jury rules document found in Aretha Franklin’s couch is valid willLonger Reads
Read more
Can we avoid delays in setting up powers of attorney?Shorter Reads
Read more
Lasting Power of Attorney delays and potential solutionsShorter Reads
Read more
How will the Autumn Statement impact inheritance tax
Podcasts
Listen now
Where there’s a Will, there’s a way (Part 2)
Podcasts
Listen now
Where there’s a Will, there’s a way (Part 1)Shorter Reads
Read more
Gifts and Lasting Powers of Attorney (“LPAs”)Shorter Reads
Read more
How women can prepare for their greater exposure to IHTVideos
Watch now
The importance of having a Will and reviewing it regularly
Shorter Reads
Read more
Coronavirus – Can I create a Will while observing social distancing?Longer Reads
Read more
Coronavirus: Tax and Estate Planning Tips in the LockdownLonger Reads
Read more
Coronavirus – Can you create a Will while self-isolating?
Shorter Reads
Read more
What happens if a will is found after an estate has already been divided?News
Read more
Tax and Estate Planning team continues strong growth with new Partner hireShorter Reads
Read more
Why apathy isn’t good enough when it comes to Wills
Shorter Reads
Read more
Which parent died first and why does it matter?
Shorter Reads
Read more
Are robots writing your will?
Shorter Reads
Read more
Why giving money to UKIP might give you a large tax billShorter Reads
Read more
Why you will no longer need to swear when visiting your solicitorShorter Reads
Read more
Why you will no longer need to swear when visiting your solicitor
Shorter Reads
Read more
Leave your estate to loved ones rather than up to chanceShorter Reads
Read more
Don’t e(stop) til you get enoughShorter Reads
Read more
Lawyer legacy leaves large litigation liabilityShorter Reads
Read more
Socialite Tara Palmer-Tomkinson left her fortune to children she never had
Shorter Reads
Read more
Unsent text accepted as dead man’s Will by Australian court
Related content
Shorter Reads
Should I protect my finances ahead of US and UK elections?
Senior Associate Aidan Grant responds to the concern of a Financial Times’ reader about potential tax changes after the 2024 elections in the UK and US, given their dual residency and high-income status.
Published 31 January 2024
Associated sectors / services
Authors
“Are there any steps that we should take now to protect our assets? My wife and I both fall into the highest income tax band, and while this money is mostly earned in the UK, we own property in the US and have savings accounts and other investments there.”
Americans commonly seek estate planning guidance from US-based attorneys. While the resulting plans may be tax efficient in the US, there may be potential UK tax pitfalls.
Grant advises caution regarding possible double taxation, suggesting careful tax reporting to claim credits in both countries where possible. Simply paying taxes in both countries as they arise is often the best way to maximize credits and minimize future UK tax liabilities on remittances.
Potential tax changes in both countries could result in wealthy couples becoming exposed to higher levels of taxation upon their deaths. However, leaving wealth either outright or in an appropriate will trust for a surviving spouse’s benefit should remain excellent and highly tax-efficient planning that may outweigh the costs and inconvenience of US probate.
Grant also highlights the complexities that arise if one spouse becomes a significant shareholder in a UK business, as US tax and reporting requirements may apply. He suggests considering tax-efficient wills to defer UK inheritance tax and US estate tax until the surviving spouse’s death.
Grant advises against exceeding the UK inheritance tax allowance with lifetime trusts for UK-domiciled individuals, but suggests exploring options if one spouse is not UK-domiciled. He recommends considering whether to create a trust before the UK election to preserve tax efficiency over non-UK assets and, utilising the larger US estate tax allowance. However, he warns of the need for careful planning to avoid double taxation on the trust’s income and gains.
For more information, please visit our US/UK Tax Advice page and check out our UK/USA podcast series.
This article was first published by the Financial Times on 30 January 2024.
Associated sectors / services
- UK/USA tax & estate planning
- Wills & Succession Planning
Authors
Need some more information? Make an enquiry below.
Subscribe
Please add your details and your areas of interest below
Article contributor
Aidan
GrantSenior Associate
Specialising in International trusts, tax & estate planning, Private wealth, UK trusts, tax & estate planning and US/UK Tax & estate planning
Enjoy reading our articles? why not subscribe to notifications so you’ll never miss one?
Subscribe to our articlesMessage us on WhatsApp (calling not available)
Please note that Collyer Bristow provides this service during office hours for general information and enquiries only and that no legal or other professional advice will be provided over the WhatsApp platform. Please also note that if you choose to use this platform your personal data is likely to be processed outside the UK and EEA, including in the US. Appropriate legal or other professional opinion should be taken before taking or omitting to take any action in respect of any specific problem. Collyer Bristow LLP accepts no liability for any loss or damage which may arise from reliance on information provided. All information will be deleted immediately upon completion of a conversation.
Close
