Why Waiting on Proposed Wealth Tax Changes Isn’t a Good Idea

For high-net-worth individuals and international families, wealth planning is rarely straightforward. The tax landscape is constantly shifting, with governments introducing new rules, closing loopholes, and reforming existing structures to generate more revenue.

At present, discussions around new or expanded wealth taxes are gaining momentum across multiple jurisdictions. Whether it’s inheritance tax reforms in the UK, estate tax adjustments in the U.S., or changes to succession duties in Europe, the direction of travel is clear: governments are targeting wealth transfers and accumulated assets.

But here’s the mistake many families make: waiting to see what happens before acting. On the surface, this seems sensible — why make big financial decisions when the rules aren’t finalised? Yet, waiting can be the most costly decision of all.

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The Current Climate: Why Wealth Taxes Are Under Review

Governments are under pressure to balance budgets after years of high spending. Ageing populations, strained healthcare systems, and rising public debt mean that taxing income alone isn’t enough. Instead, policymakers are increasingly looking at accumulated wealth.

Some examples:

• UK: From April 2027, pensions will fall within the scope of inheritance tax (IHT). Proposals also exist to simplify IHT by reducing allowances.
• U.S.: The federal estate tax exemption is set to fall by half in 2026 (from $13.61m per person to around $6–7m), potentially exposing thousands more estates.
• Spain & France: Succession and gift tax regimes are already among the strictest in Europe, with growing focus on lifetime gifts and intergenerational transfers.
• OECD Reports: Several international bodies have recommended wealth taxes as a way to combat inequality.

In this environment, wealthy families are firmly in the spotlight.

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Why Waiting Could Be Risky

1. Proposals Often Become Law Faster Than Expected

Governments sometimes announce consultations years in advance, but when fiscal pressure mounts, reforms can accelerate. By the time legislation is passed, options to restructure wealth may be limited or lost altogether.

Example: In the UK, the inclusion of pensions in IHT from 2027 has been announced years ahead. Families waiting until 2026 to act risk missing the chance to make gradual changes such as gifting, restructuring, or trust planning.

2. Planning Takes Time

Restructuring wealth is not a one-week process. It can involve:

• Setting up trusts or foundations.
• Restructuring investment portfolios.
• Coordinating cross-border tax advice.
• Updating wills, deeds, and legal frameworks.

Some strategies also require time to “season” before they are effective. For instance, UK “potentially exempt transfers” (PETs) only fall outside the estate after seven years. Waiting until rules change may eliminate this valuable planning window.

3. Acting Early Unlocks More Options

Once a new wealth tax is in force, many of the most efficient strategies are closed. Lifetime gifting allowances, trust structures, and pension planning are often less effective under new regimes. Acting before reforms take effect allows families to take advantage of current, more favourable rules.

4. Market and Economic Risks Don’t Wait

Delaying wealth planning also means delaying portfolio reviews, succession strategies, and risk management. Market volatility, inflation, and currency shifts can erode wealth faster than tax. Waiting for governments to finalise rules can leave families exposed to avoidable risks in the meantime.

5. Uncertainty Creates Stress

For many families, uncertainty is as damaging as taxation. Without a clear plan, it’s hard to make confident decisions about business succession, lifestyle, or philanthropy. Taking proactive steps provides reassurance and control, even if legislation evolves.

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Planning Opportunities to Consider Now

Instead of waiting, families can act today using well-established strategies that remain effective regardless of future reforms.

1. Lifetime Gifting

Most countries allow annual or lifetime gift exemptions. Spreading gifts over time reduces the taxable estate and may avoid future restrictions.

2. Trusts and Family Foundations

These structures provide flexibility, asset protection, and continuity. Even if rules change, assets already placed within compliant structures often benefit from grandfathering provisions.

3. Reviewing Pensions and Retirement Accounts

With pensions increasingly targeted, it’s vital to review beneficiaries, nominations, and alternative vehicles. Acting early ensures families adapt before 2027 changes in the UK or similar reforms elsewhere.

4. Succession and Business Relief

Family businesses and agricultural holdings can qualify for significant tax reliefs, but only if structured correctly in advance. Waiting may mean missing deadlines or failing to meet qualifying criteria.

5. Cross-Border Coordination

For expatriates and internationally mobile families, double taxation risks are real. Coordinating estate planning across jurisdictions now prevents exposure later.

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Case Study – The Cost of Waiting

The Smith Family (UK/U.S.)

• In 2022, the Smith family heard rumours about changes to U.S. estate tax thresholds and UK IHT reforms. Believing it was best to “wait and see,” they did not take action.
• In 2026, the U.S. federal exemption dropped by half. Their estate, previously exempt, now faced a multi-million-dollar liability.
• At the same time, the UK reduced allowances for lifetime gifts, making efficient transfers far more difficult.

By waiting, the Smiths lost the chance to restructure, resulting in unnecessary tax exposure and the forced sale of family assets.

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The Role of Professional Advice

Generational wealth and tax planning is complex, especially for expatriates and HNW families. An adviser can:

• Model the impact of potential reforms.
• Identify strategies that remain effective regardless of future changes.
• Coordinate planning across multiple jurisdictions.
• Provide ongoing updates as legislation evolves.

The right advice ensures families don’t fall into the trap of waiting too long.

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Conclusion

Wealth tax reforms are rarely designed to benefit the wealthy. While it may feel safe to wait until changes are finalised, inaction is often the most expensive choice.

By acting early, you gain more flexibility, more options, and more time for strategies to work. Even if governments shift the goalposts, proactive planning means you’re better positioned to adapt.

The lesson is simple: proactive planning can protect your wealth and preserve more of your legacy for the next generation.

At Blacktower, we specialise in helping international families and expatriates prepare for the future. If you’re concerned about potential wealth tax changes, speak to a qualified adviser.  We work closely with tax professionals and can introduce you to the right expert if needed.

This communication is for informational purposes only based on our understanding of current legislation and practices which are subject to change and are not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. Investing involves risk. The value of investments can go down as well as up, and you may not get back the amount originally invested. Past performance is not a reliable indicator of future results. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.