Although the majority of advisers (84%) say their clients are still willing to use legitimate tax planning measures, 15% report that clients have been put off such strategies over the last year because of negative publicity around tax evasion and aggressive tax avoidance.
More than one in ten advisers have seen up to 20% of their clients put off legitimate tax planning, while 3% said 20-40% had been dissuaded from planning:
High profile cases
There are a wide range of legitimate tax planning measures available to UK savers, ranging from use of gifts and trusts for estate planning, to tax relief when investing in enterprise investment schemes.
But high profile cases over the last year have impacted on consumer appetites for vanilla tax planning.
Publicity around abuse of the tax system and aggressive tax avoidance should not discourage normal savers from organising their finances in a tax efficient way with the help of a financial adviser, OMW has warned.
Common sense
Rachael Griffin, financial planning expert at OMW, says: “Efficient tax planning is good common sense and not something to be ashamed of. Those that save for the future and build wealth for themselves and their families should not be put off planning because others choose to abuse the system.
“But this data shows there is a real risk that normal people feel stigmatised or pressured to pay more tax than is necessary.
“Normal tax planning tools such as trusts and potentially exempt transfers are permissible under UK tax law and there is no issue with using them to manage personal tax liabilities. These tools are designed to allow people to pass on their accumulated wealth to their children, grandchildren or other friends and family without giving almost half of it to the taxman,” she says.
