Inheritance Tax  

Guide to intergenerational wealth transfer

  • Explain how conflict has arisen when wealth is being passed down
  • Explain who is making the investment decisions
  • Identify the pitfalls when it comes to passing on wealth
CPD
Approx.60min
Guide to intergenerational wealth transfer
 Credit: Pexels/Pixabay

Introduction

The gap between different generations is widening.

This has been compounded by a combination of an ageing population, a prolonged period of low interest rates, a long-term rise in house prices over the last 30 years, a shift in the labour market towards self-employment, changes to student funding, while technology and government policy changes have reshaped the financial lives of UK consumers.

Meanwhile, the pandemic has sharpened these differences even more.

Many individuals have lost jobs, been furloughed or taken pay cuts. 

Others are saving more money than before, cutting back on commuting, holidays and other activities. Covid-19 has also led many to consider their mortality and plan for the future by making a will. 

The pandemic has impacted the retirement plans of many people.  Some have had to postpone their retirement, either because of the need to shore up failing businesses or because of falls in the value of their retirement funds. 

Others have been furloughed or lost jobs, denting or pausing pension contributions.  

The pandemic has reset a lot of family priorities when it comes to their finances. 

“Covid-19 has not hit the population equally – some have seen huge losses (financially and personally) while others have experienced significant financial gains,” says John Porteous, group head of distribution at Charles Stanley. 

“Many have seen their incomes impacted by job insecurity, while not directly impacted, parents and grandparents may be drawing down funds to help younger members of their family in need.  This can result in reduced business or client losses as their circumstances are changing.”

So against the backdrop of what has been a challenging year, this guide aims to examine how advisers can navigate the conflict that can arise in conversations about asset distribution when different generations in a family have different priorities.

And what the pitfalls are that advisers need to help families watch out for when wealth is being passed down the generations. 

It is worth an indicative 60 minutes’ CPD. To access Charles Stanley’s Book of Stories white paper on intergenerational wealth, worth two hours’ CPD, click here.

In this guide

CPD
Approx.60min

Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

  1. According to John Porteous, how does longevity contribute to the potential conflict that could occur when it comes to discussions over asset distribution?

  2. True or false. It is only the millennials that show an interest in ESG.

  3. True or false. For the most part, from an inheritance tax perspective, it is usually in the benefactor’s benefit to gift part of their wealth during their lifetime to avoid it becoming part of their estate

  4. Which statement is correct?

  5. Why does Jessica List say that for the person giving away the wealth, it is definitely important to consider their own needs?

  6. Which of the following factors has not deepened the financial differences between generations?

Nearly There…

You have successfully answered all the questions correctly, well done!

You should now know…

  • Explain how conflict has arisen when wealth is being passed down
  • Explain who is making the investment decisions
  • Identify the pitfalls when it comes to passing on wealth

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