In today’s evolving tax landscape, high-net-worth individuals face more than just the usual market and investment risks. For those who’ve built significant business value, real estate holdings, or generational capital, the key question is no longer simply growth, but preservation. Here are five essential strategies for preserving wealth when the tax burdens are rising.
1. Strategic Use of Tax-Efficient Wrappers & Reliefs
Taxes on income, capital gains and inheritance are shifting rapidly, particularly for business owners and those with substantial estates. Ensuring that wealth is held in the correct structure can make a material difference to what is passed on. For example, utilizing ISAs, pensions and tax-wrapped vehicles remains foundational.
Beyond these, high-net-worth investors may consider structures such as family investment companies (FICs) or holding companies that allow income or growth to be taxed at corporate rates rather than personal rates.
The objective: reduce tax drag so wealth can compound and endure.
2. Implement Robust Succession & Trust Planning
Wealth preservation isn’t just about what you’ve built, but how it is transferred. Trusts, gifts and succession planning are critical tools. They allow control, mitigate the risk of unwanted claims or probate delays and, if properly structured, reduce inheritance tax (IHT) exposure.
Wealth should be viewed as a generational enterprise and planning mechanisms should reflect that. A trust alone is not a solution; it needs to be integrated into a wider estate-and-business strategy.
3. Business Protection as Wealth Protection
For owner-directors, businesses often represent the core asset of their personal wealth. Loss of leadership, major client departure, or insufficient cover can destabilise both the business and personal estate value.
Key Person cover, Shareholder Protection and Business Loan Protection become strategic not just for business continuity, but for wealth preservation.
Additionally, using life assurance properly structured (e.g., whole-of-life policies placed in trusts) can address IHT liabilities and provide liquidity for heirs.
4. Diversification into Alternative & Non-Correlated Assets
High-tax environments demand more than adjusting share portfolios. Consider diversifying into alternative assets private equity, infrastructure, real estate or art that may offer less correlation to public markets and greater structural tax advantages.
Moreover, strategy should include hedging against inflation, adapting to rising interest rates, and selecting asset locations (jurisdictional, legal vehicles) optimized for tax efficiency.
5. Regular Review & Adaptive Governance
Tax rules, business regulations and global mobility factors are in flux. A strategy built in isolation risks becoming outdated. It’s critical to schedule regular reviews of structure, investment holdings, leadership succession and domicile/residence status.
Governance should include clear decision-making frameworks, documented processes for managing the family or business enterprise, and a willingness to adapt.
Conclusion
In a high-tax environment, preserving wealth demands an integrated approach: tax-efficient structuring, business protection, generational planning, alternative assets and vigilant governance. For those who’ve worked to build their enterprise and estate, the goal is not just wealth accumulation, but wealth permanence.
Reference Links
“Advisers urge wealthy Britons to consider life assurance to reduce IHT”, Financial Times. Financial Times
“Effective wealth preservation strategies in the UK”, LEXeFISCAL / PCD Group. PCD Group
“High-net-worth estate and legacy planning, and wealth preservation”, Marsh Private Clients. marshprivateclients.com
“Tax-efficient investment strategies to preserve and boost your wealth”, Azets Wealth Management. One Azets