The New Year will continue to bring both challenges and opportunities with no shortage of demand and need for qualified and highly experienced trust and estate practitioners to advise, support and help families better plan for the future, according to STEP.
Emily Deane, Technical Counsel & Head of Government Affairs at STEP said that the ‘Great Wealth Transfer’ will continue as baby boomers pass on assets to younger generations. She added:
“High-net-worth families are prioritising succession planning, family businesses, charitable giving and wealth preservation. The fall-out from the Budget will bring greater focus and action on succession planning.
In advising on complex multi-generational estate planning, advisors will increasingly consider the changing priorities, expectations and preferences of younger generations. Millennials and Gen Z are looking to prioritise socially conscious decision making more than previous generations.”
Deane also said that digital assets like cryptocurrency, NFTs (non-fungible tokens), and online businesses are integral to estate planning, and will become more so. Training, upskilling and CPD will help advisors stay on top of technological advancements, particularly how using AI appropriately can streamline their work, and HMRC’s scrutiny of crypto transactions.
What’s more, budget changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) will “continue to have a significant impact”. There will be calls for greater clarification, more administrative burden and the impact of providing accurate valuations for APR and BPR assets will be a challenge, especially as tax reliefs are more narrowly targeted, as stated by STEP.
The existing strain on HMRC’s valuation resource (in England, Wales and Scotland) will be “further exacerbated”. The valuation process “will need further clarification, especially in relation to the inclusion of farming crops as assets and how machinery, land and business operations are treated” in relation to tax reliefs. Deane added:
“Globalisation continues to make cross-border estate planning increasingly relevant. UK advisors’ clients often hold international assets, which raises domicile, tax treaty and compliance concerns.
Advisors will be continuing to assist their clients to navigate regimes like the Common Reporting Standard (CRS).
This year we have presented STEP’s Global Representative Power (GRP) at leading conferences across the world. The GRP is a template and a benchmark for a lasting power of attorney that is globally recognised and portable. We hope jurisdictions will continue to review and improve their power of attorney legislation next year.”
Wealth increases, complex family dynamics and greater public awareness of legal rights will “help fuel litigation and contentious disputes” involving undue influence, testamentary capacity and trust mismanagement.
